Option # 2 : Using MS Outlook's AutoArchive wizard

To start the AutoArchive wizard:

Click the File menu and select Archive.... 

Select the folders you wish to archive, then select a date for which old items should be archived.  All email older than this date will be archived.

If you wish to have the AutoArchive wizard archive all folders in the Personal Folder File, click Personal Folders and make sure the option to Archive this folder and all subfolders is selected. 

Click OK to archive your selected folders and subfolders.

The archive process may take as long as 30 minutes.  Please refrain from using MS Outlook while the archive is in progress.  You can monitor the archive status in the lower right corner of the screen (i.e., "Archiving Deleted Items to D:\Documents and Settings...").

Compacting
Once you have moved all of the email folders and messages that you wish to archive, you need to "Compact" your main .pst file.  This step is important, as MS Outlook does not automatically shrink the .pst file when you archive data.  For example, if you archived out 100 MB of email from a 500 MB MS Outlook.pst file, the MS Outlook.pst file will not shrink to 400 MB until you compact the .pst file.  This process may take between 5 and 30 minutes to complete, depending on the size of your MS Outlook.pst file.  To compact your .pst file:

Click on the File menu, then click Data File Management.... 

Select the Personal Folders (not Personal Folder Archive) and then click the Settings...  button.

Click the Compact Now button to compact the mailbox. 

This step can take some time depending on the size of your mailbox, and will take even more time if you attempt to use MS Outlook during the comp