Dave Wollerman has posted a great article on the use of site collections and the benefits they have for users and administrators.

Quoting Dave:

Recycle Bins

I have 2 big, at least what I think is big, points on why to use site collections. The first one is site quotas and recycle bins. The issue is the recycle bin is based on site collections and the quota for a site collection. If everyone shares a site collection, then they share the recycle bins storage size.

Delegated Security

The second point is distributed administration. For most small companies this might be a moot point, but for high content driven organizations with a small IT force. It is a godsend for IT. IT doesn’t know who should be able to see what content, besides how it should be organized. This is the job of the content owners and users. SharePoint site collections offers IT the ability to create a site collection for a project, team, department, document, or whatever the needs are, then assign an owner and hand it off to them.

In addition to these two points is the need to separate the content between databases.  The number of large installations I have seen that have lumped all of the content (and we’re sometimes talking portal and sites) into the same content db just shows that this knowledge is not being shared.   Well done Dave for posting this!