It kind of depends on if you want to move the pieces around after you import. If you don't see a need to have a bazillion little pieces, might as well stick them all together. The point of modular design is to have a library of pieces that can be mixed and matched easily to make something look new and unique, but really is just rearranged while minimizing the number of assets.
So for example you're making a big brick building and you find that you've used the same brick tile 50 times without altering it. It would probably be a waste to weld it all together and import it as one giant unique object. Instead import that one piece and copy and arrange it in the editor 50 times.
Depending on the engine, there are costs and benefits to instancing geometry. Often there is a point that it becomes easier on the engine to import larger chunks. The general info that I remember is that it mostly saves on texture memory space first, and actual 3D data second but with some kind of weird cut off point. But that's a discussion for programmers and game designers, I just roll my face around on the keyboard until something pretty pops up...
Small library of parts makes a huge city.
Large library of parts makes a tiny but very unique city block.
Or a mix of the two...
It all depends on what you're trying to do, the scope of the game, and the engine. Even in the same game you'll often find a mish-mash of techniques, so there isn't one right way to do it, just a best possible scenario for area being created at the time.
So many questions need to be answered before you sit down and decide, I'm going to do things this way. I really think the key to success is thoughtful, methodical planning. I once read that if you have 5 days to do a project, you should spend 3 days thinking about what you're going to do, and spend 2 days getting it done, and possibly work the weekend because there actually is 4 days worth of work to be done, ha! That doesn't mean jack around and surf for porn that means lock yourself in a room with nothing but your thoughts of the project on your mind. This isn't waiting for inspiration its creating a battle plan for the 2 day war you're going to wage. [/soapbox]
Good luck! Post progress as you go!
Last edited by Mark Dygert; 02-19-2009 at 09:22 AM..