Analysis And Development

The question involves some other related questions, I'll just throw every single on of them feel free to answer one or many of them.

1.What are the advantages of separating Projects/DLL?
2. What are the disadvantages of separating Projects/DLL?
3. If I create a new solution/DLL for every shareable resource, isn't going to be lots of projects?
4.After too many projects (like 40+) is this going to have some bad effects of IDE performance (VS.NET 2008)?

I'm asking this question because I've got this big solution with so many different classes and because now I need to separate some interfaces it's all falling apart (circular dependency problem) and now I need to create multiple DLLs, I just want to be sure to do it in the right way this time.