So, I've had this discussion either internally or with clients a few times, and I agree with alot of what Dave has to say in this post:
http://www.sharepointblogs.com/llowevad/archive/2007/06/25/site-collection-logical-architecture.aspx
Of particular note is the clients I've had ask me about curtailing space usage, and the fact that Quotas can be applied at the site collection level only. Not at the site level. So, in a particular customer's case, this entailed separate site collections for their five functional areas, as opposed to one site collection with sites created for each of the functional areas. This was necessary because they were using the MSDE built-in engine and had to keep a very close granular eye on how much space was used in each area as they only had 4GB overall.
Yet another Add! 11.15.07:
So, here will hopefully be my last addition to this beaten, tired horse:
When you go to add a content database, which is done per web app, like so:

And then hit the drop-down to get to your main portal web app (perversely, this always seems to default to your SSP web app, dunno why):
When, you get to this screen, you'll see just one SQL database. If you now click "Add a content database" you'll be prompted to add a SQL database to the current web app you're viewing. To me, all this talk about separate site collections is a bit futile without this step, as adding content dbs speaks towards a long look down the road towards the future and potential growth.
Here's a case where I've added two additional content databases and then added all the site collections:

Note that I have 11 separate site collections here and they were created in separate content databases, round-robin style, as they were provisioned. Viewing these db's in SQL Manager Studio would show a decent distribution in size as the site collections are similarly sized. Well, actually, there was one site collection I needed to add that I knew was going to have a lot of documents imported right away, but the round-robin was set to create the next site collection in a database that was already pretty large. So I created a dummy site collection to go there, then created the one I knew would add alot of size, and it provisioned smoothly into the next content db where there wasn't so much space used.
Note also that no, you cannot move a site collection from one database to another after creating it, unless you save, then delete, the whole thing and then jury-rig where it will go (via the above method of creating dummies until a slot is open in the db you want).
End Add 11.15.07
Added 11.14.07:
Another benefit of separate site collections. If you need to lock a certain portion of the web portal, you have to do so per site collection. So with your portal split up into site collections, you can lock just the portion you desire.
End Add
Here's the pain, though:
You have to go through and fix the Global and Current Navigation for every site collection! This doesn't sound like a pain, but think about having to go in and fill out this screen:

FORTY TIMES! Yep, that's right. Because the formula works out to:
N(N-1) X 2
where N=Number of Site collections. This is because on each site collection you have to modify both the global and current nav (thus the X 2 at the end up there) to include a reference to every other site collection save the current one.
It's also a pretty good idea to go in and create a portal site connection for each of the site collections, so you at least have the very top cookie crumb leading back up to your "main" site collection:
Also, you'll have to set your site theme, master page, and icon for every one of your site collections. There's no "trickle down" between the first created site collection in a web app and the others.
Additionally, the Search on each site collection will only search the local site collection by default, though I'm guessing someone's figured that one out. But it'd be just another customization to apply N number of times.
So, all that said, there's lots of pros with going with separate site collections for separate functional areas, but it's no walk in the park.
Added 11.08.07:
So, list of all things that need to be performed cross-site collection for administration and site consistency, if these are the goals:
1. Security
2. Title, Description, Icon
3. Site Theme
4. Site Collection Quota
5. Global and Current Navigation
6. Portal Site Connection
Caveats to remember:
1. Search defaults to the top-level of the site collection down (so a user would have to go back to the "main" site collection to search.
2. Content Query Web Part doesn't allow query across site collections... this is pretty big:
"Cannot save the property settings for this Web Part. The site URL is not valid. The site URL should refer to a site in the current site collection and should be specified as a server relative URL, as in "/sites/busdev"
And this is true regardless of where site collection is, ie you could build your site collection at a totally separate web app and, thus, address, and this applies. It also applies if this is a site collection built in a managed path, ie \sites\sitecollname . Even in this case, where the site appears to be "hanging off" of the main site collection, the fact that it's a separate site collection negates the ability to query content.