I would personally recommend waiting for TFS 2010 when more functionality will be introduced that will assist you in the ability to "archive" Team Projects.
In TFS 2010 you will hopefully be able to move a team project to a new Team Project Collection. Actually you do this by duplicating your "active" project collection and then deleting all the team projects from it apart from the one that you want archived. In this active project collection, delete the archived project that you have a copy of in the duplicated project collection. This archived team project will then live in it's own project collection which means it has it's own database etc which can be easily backed up / archived etc.
The archived team project project collection can then be left as it is as it doesn't slow down the server any if not being used - or it could even be detached from the TFS Application instance so that it doesn't show up at all and re-attached at any time.
An advantage of using project collections in TFS 2010 is that full Version Control and Work Item Tracking history will be maintained.