yes book has its place, there are so many things tho: checout: theindesigner.com he had a good vid tut on that....
One of the big advantages to using a book (besides any for doing epub, which is not currently part of my workflow), is that it breaks your project into more manageable chunks. Besides allowing several users to work simultaneously on differnt parts, it's faster and easier to scroll though a 100 page chapter than a 1000 page book, for example. A byproduct of this "chunking" is also that you have a bit more security agains file damage. Should something go wrong, you'll probably lose only one piece of the project, not two whole years of work.
That said, many users find it a lot more convenient to have everything in one file. If you use cross-references, you probably will want to go that route for sure. Cross-refs between docs, at least ID's native cross-refs, are less than spectacular in their reliability. I believe there are issues, too, with TOC bookmarks in Book files exported to epub. The ability to synchronize things like swatches and styles is great, but if you have only one file, there's no need to synchronize anything.
Basically, it comes down to personal preference and an analysis of the pros and cons for each particular project. There is no single answer that is correct for all situations.