I organize by place, then time, as in

Columbia Gorge
    Multnomah Falls
         07-05-01
             PSD (For anything that gets postworked)
    Wahkeenah Falls
        07-06-05

The photo drive is 500 GB and mirrored and backed up.

If I'm looking for a photo on the drive, I'll be asking myself "where is that shot of Multnomah Falls" not "where is the shot I took on July 1 of this year" so this system works for me. Organize your stuff in the way that will make it easiest for you to find it.