How do you structure and set up projects in VS Code?

I'm trying to understand the best approach for organizing multiple projects. There are two ways I've seen:

One workspace, multiple folders — keep everything under a single workspace, with each project as its own folder inside it
Separate workspace per project — each project gets its own independent workspace

What are the pros and cons of each? Which approach do most developers actually use, and what's recommended for someone just starting out?

Also, how do you actually set each one up in VS Code? Step-by-step instructions would be helpful.

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