I am doing testing in preparation for moving to v4. One thing I'd like to change as part of that move is the location of the project files in relation to the class files.

Out of the box LLBLGen generates a folder structure that looks like this:

Destination Root Folder
    -DatabaseGeneric folder
        --EntityClasses folder
        --FactoryClasses folder
        --HelperClasses folder 
        --more folders   
    -DatabaseSpecific folder
        --ActionProcedures.cs
        --App.config
        --more files
    -DatabaseGeneric VS project file
    -DatabaseSpecific VS project file

I'd like to have the project files inside the related folders (Generic VS project file inside the DatabaseGeneric folder and Specific VS project file inside the DatabaseSpecific folder).

Destination Root Folder
    -DatabaseGeneric folder
        --EntityClasses folder
        --FactoryClasses folder
        --HelperClasses folder 
        --more folders 
        --DatabaseGeneric VS project file
    -DatabaseSpecific folder
        --ActionProcedures.cs
        --App.config
        --more files
        --DatabaseSpecific VS project file

I've changed the presets to include the subfolders in the path

      <taskPreset name="SD.Tasks.Adapter.VsNetDbGenericProjectFileCreator">
        <parameters>
          <parameter name="templateID" value="SD_VsNetAdapterTemplate" />
          <parameter name="destinationFolder" value="[driverShortName]\[dbgenericSubFolder]" />     
        </parameters>
      </taskPreset>

<taskPreset name="SD.Tasks.Adapter.VsNetDbSpecificProjectFileCreator">
        <parameters>
          <parameter name="destinationFolder" value="[driverShortName]\[dbspecificSubFolder]" />
          <parameter name="filenameFormat" value="[projectName][dbspecificSuffix].[extension]proj" />
          <parameter name="templateID" value="SD_VsNetDBSpecificAdapterTemplate" />
          <parameter name="binRootFolder" value="[driverShortName]\[dbspecificSubFolder]\" />
        </parameters>
      </taskPreset>

This seems to accomplish what I'm trying to do. Am I missing anything else? Are there any reasons not to do this?

Not at all, you are set to go.

Actually, I had to make one other change for the binRootFolder parameter or the bin folders ended up in a strange place.

<taskPreset name="SD.Tasks.Adapter.VsNetDbGenericProjectFileCreator">
        <parameters>
          <parameter name="templateID" value="SD_VsNetAdapterTemplate" />
          <parameter name="destinationFolder" value="[driverShortName]\[dbgenericSubFolder]" />             
          <parameter name="binRootFolder" value="[driverShortName]\" />
        </parameters>
      </taskPreset>

<taskPreset name="SD.Tasks.Adapter.VsNetDbSpecificProjectFileCreator">
        <parameters>
          <parameter name="destinationFolder" value="[driverShortName]\[dbspecificSubFolder]" />
          <parameter name="filenameFormat" value="[projectName][dbspecificSuffix].[extension]proj" />
          <parameter name="templateID" value="SD_VsNetDBSpecificAdapterTemplate" />
          <parameter name="binRootFolder" value="[driverShortName]\" />
        </parameters>
      </taskPreset>

Thanks for the feedback.