So in installations with many users I am not sure if there is a good way to limit the user and project pull-down list so that those users in certain department of the organization can only see those users and projects in their department. Maybe this can already be accomplished through permissions and I just haven't groked it yet? <--quite possible!

The functionality I would like to see, though, would be something like this:

There would be a mechanism for assigning a user a home department. Then ,in a project, you build a team (even with users from different department).

However, only users from the project team will be listed in the drop-down lists for issues creation, etc..

Also when users log into the system on their home they would only see projects associated with their home department.