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I probably have nearly 900 books on my nook (many of them freebies); I keep some of them archived or not-downloaded* (especially if I've already read them and don't think I'll care too again) if they're on the B&N account. I use the "search" function to find specific titles or authors, and have shelved them all by genre and whether I've read them or not. I still have plenty of space on my card.
* I realize this may be weaseling, but they do (or, in the case of archived books, can if I toggle my view) show up in my library and I can click to download/unarchive at any time.
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