My wife has an interesting twist to her file organization.
She has a career in the civil service, and now non-profit sector and creating, editing, reading, commenting on, and sending out documents is her work day. She is one of the most organized people I know.
She puts the date at the front of every file, in this format - yyyymmdd. So, the document about Astronomy is called '20090415 Astronomy'. Now all the documents in the folder will sort themselves by her creation date (not always the same as the system creation date) and will maintain that sorting even if moved, copied, cloned, emailed, moved across platforms etc.
Its seems to me you could use smart folders to then sort your documents into semesters. If you physically start a paper before the start of a semester you can still date it to fall within the dates for sorting.
She uses colour labels sparingly. Its a lot work to manage colours for each and every file, but she does tag the "due imminently" files with red and uses a smart folder to sort those out.
She has folders for big projects, and then subdivides those - rarely does she go for a 3rd level.
She names things carefully, sometimes with long names, so she can find them by name. I don't know if this because she doesn't like tag words, or some other reason.
She does use spotlight alot.
I, on the other hand, tend to be terribly organized. I am a fine art photographer, run a gallery, help organize shows, sit on several volunteer boards. My files are messy.
I don't mind deeply nested folders, but I like to see less than half a dozen folders in each level. As I navigate I make a decision: Is what I'm looking for Gallery Business, or not. Is it personal, or photographic. Is it a group I belong to, or not. Until I find the folder I want. The problem I still have is how to organize a project. I like to have all my pictures in the Pictures Folder, and I like having all my documents in my Documents Folder. So I still struggle with Project Folders that include pictures, and documents potentially from several folders. I try to remember to use alias in this case.
IBM, way back in the days of mammoths, had an OS called OS/2 which had a brilliant folder. They created a type of folder called a Work Space. Essentially, anything and everything you dragged into the folder became an alias. Any application icons you dragged in were aliases as well, and .... if you had several documents open you could close the Work Space folder, and all the documents would close too. Re-open the Work Space folder, and all the previously open documents and applications would re-open as well. You could close and open projects instantly. I would pay good money for the same feature in OS X.
I am looking forward to seeing where this thread goes. Thanks to the OP for starting it.