Some people recommend that this is done through creating multiple Catalogues ie Yearly or even per Job
This is a horrible idea that defeats the entire purpose of the Lightroom Library Module. Anyone recommending this needs to explain how it is better, because it is not better in any way, in my opinion.
If you have multiple catalogs, you cannot perform searches of your entire set of photos. You cannot find all photos with particular metadata, you can only find the photos with that metadata in that one catalog.
as this prevents LR lagging under the strain of a large portfolio
A problem that simply doesn't exist. People in this and other forums report catalogs of over 500,000 images working well.
Others say to keep the Catalogues down to an absolute minimum and sort all projects by Collections instead.
Most people I know (including most people in this forum that I have read) say to keep everything in one catalog. Use keywords and other metadata, not collections, as your primary organization tool. Smart Collections are used as a search mechanism (not a "sort" mechanism). Regular collections are used to group photos together for a specific task, such as creating a book, slideshow, web page, etc. (again not a "sort" mechanism.
As far as I am concerned there are only 2 rules to follow:
Rule #1 - Read what dj has just said above.
Rule #2 - If you feel an urgent need to create 2 or more catalogs, refer to rule #1.
Yes, for 99% of people, one catalog is the way to go, but there are a few situations that even I agree there are valid reasons to have multiple catalogs. However the OP hasn't mentioned any of those valid reasons, and it sure sounds like he thinks multiple catalogs are the way to go to prevent "strain" on Lightroom, which as I said, is a problem that doesn't exist for normal and even very large sized catalogs. Maybe if you're getting close to 1,000,000 images, there might be a problem, I don't know, I haven't ever seen anyone state that they have 1,000,000 images. The OP doesn't have that many images, based on his 500 gig statement, so what happens at 1,000,000 images is irrelevant anyway.
Thanks for the input guys Seems there is a right and a wrong way after all.
What you say about limiting the search facility in Lightroom by creating multiple catalogues makes perfect sense. Also like the idea of grouping using metadata rather than Collections.
Much appreciated - John