When you get into the act the students are already interested in the topic. Also it gets their minds off other things and into the topic for the day. We have a final project and allow the students to work in groups. This is less successful. Often one student does all the work and it is hard to be fair in the grading.
Some projects require more than one person to carry out and, for such projects, group work is great.
Group homework assignments work well too, as long as your students live in the same general area. However they are pretty poor for individual assessment. Problem-solving in class on longer, harder problems is fun but given the content demands made on us by the syllabus, there is not enough time in almost every class I've taught to do it. Projects tend to be hard for the students and some will give up too soon. There seems to be a new ethic among students about homework.