Book layout question due to lack of functionality in InDesign

I am a doctoral student (cancer cell biology) starting to write my dissertation (in Word 2007) and I'm using InDesign CS3 (5.0.4) for the layout (I refuse to layout figures and tables in Word... tried it... giant pain in the a$$).  My original plan was to create a Book in InDesign and have each chapter be a separate file.  Due to the bibliography software I need to use the Word file has to be a single file (see this thread for details).  InDesign cannot just Place a range of pages (it's seems to be all or nothing) and this creates a problem (see the previous thread).
The question I have, is it smart to break each chapter out into a separate file?  My thinking was that since I would be bringing in a fair number Photoshop and Illustrator files into each chapter it would be wise to keep the file size down (I'm not doing this on the best of computers, at least by graphic designer standards) and it would make rearranging a little easier (my mentor has a habit of changing his mind and chapter 3 could easily switch places with chapter 7).
This is my first book so any thoughts or advice you have would be greatly appreciated.
Regards,
Adrian.

Nah, it's just me.  My mentor wants paper output for the markup, the committee will take a PDF or paper and the university has (thankfully) instituted an electronic submission criteria.  The final product has to be a PDF to the school and I'll have some output to paper and bound for my mentor, my family (as a gift) and myself.
The two students before me did everything in Word and yeah you can make Word do it but I just don't hassle with it.  I make religious use of styles in Word (and only 4 styles at that... talked to a graphic designer who does books for a living "Keep the styles to minimum!!"... Done), so getting it into InDesign is cake.  Also, my mentor has a nasty of habit of constantly changing his mind and doing things like, "Can you move that picture about a centimeter to left, I just want a little space in there".  I have been through this with Word, it will do it but the voices in your head will start suggesting that you kill again (and nobody wants that).  I plan on doing my grants this way, manuscripts this way, everything.  Everybody (NIH, journals, other funding sources) requires a PDF now and some require rather optimized PDFs (people think I'm crazy but I swear there is a difference between the PDFs that InDesign outputs and the ones that my wife's Mac does--just using the built-in PDF renderer or some of the other PDF creators for Windows), so I just went ahead and went through a tutorial on VTC.com and then read a couple of books.  I wouldn't be able to layout a magazine but I can do grants, manuscripts, dissertations.

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