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Administration -> MS Project Server 2003 -> Inactive vs. Delete
Enterprise Resources: Inactive vs. Delete

Inactive Resource: When you mark enterprise resource as inactive, that particular resource still exist as enterprise resource. Also, actual work (if any) still associated with resource and you may able to show it in portfolio analyzer views and reports.

The other advantage here is, if that resource rejoined the organization, just making active again, resource will continue as enterprise resource and will have the visibility of actual work from previous projects. This will be the advantage when you are viewing the enterprise resource usage in terms of history and current.

Deleted Resources: When you delete an enterprise resource, MS project still keep that resource in project plan. MS Project Server never deletes the actual work and it will not impact on project overall effort. Resource name still exists in project plan and treated as local resource.

When deleted resource will rejoin the company, you have to create him/her again as new enterprise resource. Previous actual work will not be associated to that rejoined enterprise resource.

Note: If your organization has enterprise resource allocation reports generated from live Project Server database, you have to careful on deleting enterprise resource. If you delete the enterprise resource, you are loosing the ability of showing that particular resource actual work in reports(Local resources may not be appears in your reports). In this scenario, it is always best practice to mark unwanted resources as Inactive instead of deleting.
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