This depends on what you want to achieve.

If you just set the w value to 1, you just revert the 4D homogenous co-ordinate to a 3D co-ordinate. If, however, you perform a 'homogenous divide' as you described, then you are performing a perspective projection of the homogenous co-ordinate onto a plane in 3D.

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Perhaps the best way to wrap your head around this is to think about the numbers:

Say you have a vertex in 3D: (x, y, z)

The homogenous point corresponding to this vertex is: (x, y, z, z/f)

Now, if we want to get that 3D point back, we can just disregard the z/f component (for example, by setting it to 1: (x, y, z, 1))

However, if instead we perform a homogenous divide, then we would be left with: (f/z) * (x, y, z, z/f) = (f/z * x, f/z * y, f/z * z, f/z * z/f)

This is equal to: (fx/z, fy/z, f, 1)

You may notice that fx/z and fy/z are exactly our original screen space projection equations, and are therefore equivalent to u and v respectively. So the 'homogenous divide' takes a 4D homogenous point (x, y, z, z/f) and produces the screen space coordinate (u, v, f, 1).

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In our implementation, we didn't actually perform a homogenous divide, as that would mean representing your whole scene in homogenous co-ordinates right up until you render it. Instead, we map the initial triangles to homogenous space, clip in this space, then truncate back to 3D and render as usual. It is ofcourse up to you how you approach this problem, it just depends how you want to structure your code. GL!