This is a complex question. I am working on a wiki article that will run through many of the options and their advantages and pitfalls, best drawing settings, and registry setting tricks.
Part of the answer also depends on the hardware you have and which version of ArchiCAD. In ArchiCAD 15 more of the data that what would have ended up on disk is kept in memory making it faster. So, if you are working in ArchiCAD 15 and you have a lot of memory (16GB or more) you may find you can keep the project together longer, before reaching that point when things get slow.
The reason you break a project into Model and Layout is mainly because drawings add significant Megabytes to the projects size. The larger the project the longer it takes to share, join, open, update, back up. Larger projects are harder to re-link when you retire a server.
When you do make the decision to break up the file the decisions don’t stop at that point. The two main decisions are whether drawings will be linked from model views or you publish PMKs from your model and the PMKs are linked into the layout.
The option to link the model views has its simplicity, but the speed is definitely with PMKs. I have run some tests with a very large project with relatively small number of drawings (145). I could relink 13 drawings in about 30 minutes when they were links to model view. The same number took me 2-3 minutes when the drawings were PMKs. To publish all the drawings to PMK and update the layout book that referred only to the PMKs took 2 hours. To update the layout book that referred to the model took 2 and ½ hours. I prefer the PMK solution, but it does require a rigor in how you publish and change model view hierarchy.
I will elaborate on this more in the Wiki, but I suggest you trial in a small way the two approaches.
Additionally if you choose the PMK approach I would set the drawings to “Auto” update, and I wouldn’t store the drawings in the layout. With the Layout linked to the Model views you should definitely use “Manual” update and store in the project.
Hope this helps,
Graphisoft Technical Support