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Can i close my after effects project and work on another one if my first project is in middle of encoding through media encoder?
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Yes, of course. The process still creates special temp folders and files to prevent issues with concurrent access. just be aware that this does not apply to all footage files, since understandably it won't duplicate gigabytes of clips and that. In such a case a collect files and sending that to render might be smart if you need to use the same clips in another project or else performance may budge while the programs battle over file access.
Mylenium
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Thank you for your answer.
I"m using an after effects template that I customized. Does it make sense that its taking an hour to export for a 2 minute mp4 video?
Thank you.
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Depending on the complexity of the template this could be perfectly normal. On the other hand there is a bug in particular on Macs where renders take forever. In this case it would be better to render an intermediate file directly from AE and then encode it later in AME. You have to provide more info about your system, render settings, the template (a link to the original source) and things like multiframe rendering or cache settings for a full asessment.
Mylenium