I dont see how a 'terrabyte" file would work.

For most windows programs, if you try to open a filesize beyond a certain size; your memory runs out or your computer crashes.

I think the best solution is just that :

1. Create multiple personal folder files - name them by year  - Inbox 2011, Sent 2011, Inbox 2012, sent 2012 etc

2. Outlook will occasionally and automatically ask the 'mboss' to archive. Outlook will also create multiple *pst if the current one becomes full.

3. Get them out of the computer as has already been suggested - and put them on a server with good disk space. 

     You can also make dvd copies.

     Or put them on two separate external disks (backup)

Thats what I have done for my past 5 year emails.