Hi Shawn:
There's a balance. Projects are a learning strategy, while assessment (quizzes, tests) are a learning measurement tool. Most course have some of both. Overemphasizing the instructional component without adequate measure may not accurately reflect the students progress.
On the other hand, too many assessments (too much weight towards a grade) takes time, and may not give the student enough time to digest, assimilate, and memorize the material, thus driving the grade downwards (perhaps unfairly).
One way to approach this is to use the course objectices as measuring tools. So, your lessons focus on teaching essential and collateral objectives, while your quizzes (and tests) measure to what degree the student has mastered the material.
Regards, Barry