Thanks for the insight.
We are not really looking to gain anything in performance, but rather modularize the DAL, so the components can be used within other applications (i.e.: RSS Feeds and Web Services). The reason behinds this approach, is if we are only working with a certain module for RSS feeds, then why have the entire entity in the DAL, this would only confuse the developer and possibly 3rd party developers as well (Give them only what is needed).
As for entity relationship, that isn't an issue either, since the bulk of each group will actually not need to communication with the other groups. Most of this will be handled on the SQL Server anyway, using Views and SPs when needed.
Thanks