I don't have an HTC phone but on my Samsung Spica running rooted Eclair (2.1), here's how I restrict a particular group of contacts.
Start the CONTACTS app.
Press MENU > DISPLAY OPTIONS
Select "Show only contacts with phones" (personal prefs)
Below that will be a list of Google accounts linked to the device - each one will have system groups like FAMILY / FRIENDS / COWORKERS / MY CONTACTS etc in addition to user created groups such as "Archived" like you've created.
Just select those you wish to display and leave unchecked the groups you wish to ignore.
Hope this helps.