To customize archive settings for a folder, first you would right-click the folder and click Properties. On the AutoArchive tab of the Properties dialog box, you would click Archive this folder using these settings, as shown in the picture. Then, you would specify the archiving details for that particular folder.
Notice that you can specify that you don't want to archive the contents of the folder at any time, or that you want to delete its contents permanently without archiving them. Also, you can choose any PST as your archive folder (the folder doesn't have to be named "Archive" for this process to work).
Once you choose these settings, AutoArchive will just happen. That's what makes it so easy. Still, do remember to do periodic tune-ups. As you add or remove folders, you'll want to adjust your custom AutoArchive settings to match.
You'll probably also want to adjust your settings if you get more (or less) mail for a while, join newsgroups, or otherwise change the rate of activity in the Inbox.
Tip Test your AutoArchive settings by clicking AutoArchive in the Mailbox Cleanup dialog box, which you can get to from the Tools menu.