From the Source Project export the part you want to copy, export it to DV-AVI from the Share Menu (Personal Computer). Import the clip into the Target Project.
Insanity is hereditary, you get it from your children
I think that this would be a good addition to Steve's FAQ sub-forum, as it does come up very often.
Some users wish to split larger Projects, and some want to combine smaller Projects, but the answer is the same, just as you outlined it.
Looks great to me. I'll add any comments to a PM.