In pas 50 Tips in 50 Minutes presentations I’ve shown off the ability to prevent the sale of discontinued items. But the setting is all or nothing. You can’t control it by Item. However, you can control it with a password.
On the Sales Area Page under Setup pick Sales Order Processing and Options. Find Allow the Sale of Discontinued Items and check the box to allow the sale. Next to the setting enter a password. Now when you pick a discontinued item to sell, a password box will pop up. This gives you the choice at the time of the transaction to decide whether or not to allow the sale of discontinued items.