Its alright to have a list that big you just need to make sure you have have any views that display more than about 2000 records. Last week one of our servers kept crashing and when the Microsoft techs came out they said it was because of a list with about 15,000 items, there was a view showing 3000 items and it was causing the issue.
For archiving you can create an archive list and use a workflow to move items over based on a field. Another option is to use information management policies to track older unmodified items and trigger a workflow when they reach a certain age. http://msdn.microsoft.com/en-us/library/ms499244.aspx