Paradox of Navigation

I started reading through Schwartz's Paradox of Choice and already came across an interesting concept that can be applied to information architecture. In the subsection title "But is expanded choice good or bad" he begins to delve into the subject of many choices and does the help out a consumer or hinder him/her. On page 20 in reference to a study about choices, "A large array of options may discourage consumers because it forces an increase in the effort that goes into making a decision."
Applying this to navigation and information architecture, what does this do for designers and customers that still want to give their users as many options off of their navigation. Does the "Amazon" or "Target" show me all categories really work or does this present the users with too many choices? Is it better to let them narrow a subject with simple navigation and then broaden out once they see all their choices in further context? I would vote for the latter. Too many choices can lead to wasted time and false trails or distractions.

I'm reading(or skimming) through How We Reason. In one of my Information Architecture classes we've touched on sensemaking. I've also seen some posts on Jared Spool's site referencing the Paradox of Choice, which should be showing up soon. So I figure I'd pour through these three books over the next several weeks and see how they're related and overlapping. I'm interested in seeing how these topics can assist information architecture and usability. Especially as users begin to control their own experiences on sites, the choices that they have available are going to be critical. This will be a challenge(the good kind) for information architects.