I agree, use whatever works for you. Me, I do the seperate files until the final edit and then past them all into 1 large file.
When editing this allows me to see progress as each edited file is then renamed with a new version. If I delete a chapter, all I have to do is renumber the following chapters and pages as I edit. Also, if I move a chapter, this makes it very easy just to renumber a chapters affected and not the whole manuscript.
With a longer file, I never felt like I was getting anywhere because I could not see the progression. Also, if I deleted a chapter but wanted to save it, or part of it, I had to create a new file any way for unused stuff. For me, having everything in seperate files works best. Now, at the finish, I do have to create a new file and put it all in one file and make sure its formatted right, and it can be a little time consuming, depending on the length of the work.
Another advantage of using seperate files is because I have multiple books from this fantasy series, when working on another book and I need to look something up, I have a glossary I use that list each chapter and a brief on what it is about, and character in the chapter. This way I go to the glossary, find the right chapter and pull it up instead of searching the who main file for what I need.
Use whatever works best but back all your work up constantly. Can't tell you how many words I have lost to corrupted file, not saving in a timely fashion or computer crashes. Its got to be in the millions by now...