Glacial Erratics has a very detailed article on How I Handle Email that covers a range of issues from servers to filters to rules for reading. His aim is to cover all mail processing tasks.
First off, information handling is not an arena where the poor craftsperson may blame their tools and be scorned. Most, if not all, email clients suck. Some just suck less than others. Many are good for email browsing (I generally use Apple Mail for casual browsing these days), few are good for email processing (replying, deleting, searching, filtering, moving). I've yet to meet a GUI mail client that is good for email processing.
He closes with "What do you do?"
Setup: I have many e-mail addresses, and I can add as many as I like with my own domains. I have my basic business address, as well as addresses for mailing lists and other special interests. I also have addresses for organizations with which I have high level of activity.
Pre-Processing: I use Outlook 2003 to read all mail, but it flows through Popfile first to determine primarily if it is spam and get filed appropriately. I also use Popfile to filter into buckets that make for easy Rule setup in Outlook. All bulk mail (mailing lists) gets filed into appropriate folders via Rules in Outlook, since I want to have the opportunity to ignore these messages until I choose the time to read them. As it stands now, I have approximately 20 folders of this type. Mail that has not been pre-processed ends up in my Inbox.
Processing: My goal is to empty my Inbox at the end of the day. As I've mentioned before, I work under the 4D's when reading email: Do something in response (respond, write, think, take action, archive); Delete (read and delete); Delegate (assuming I have someone who can take action); Date Activate (file for later action, and specifically set aside the time to take this action). In all cases, when I am done, the messages should be out of my Inbox and be filed appropriately.
Archives: I have tens of folders where I archive mail, depending on what it is for. I have a rudimentary folder hierarchy for archived mail and can traverse it fairly well. If I happen to have misfiled something, I use the Outlook search tool to find it again. I've found the new Outlook Search folders to be handy at finding things that might be in many different folders.
The other part of dealing with email is that while much of my day is spent in electronic communication, I don't want it to be the center of my world. I choose when to read email, and I choose when I have time to read the bulk mail from mailing lists and the like. When I have little time, the bulk mail gets perused lightly or deleted outright.
Email is only one component of my "personal information cloud," but I sure get a lot of it. If I'm feeling motivated, I might write about where I am with other information management: calendar, tasks, notes, files, contacts.