It's best to separate it out, but not get overzealous. That way you can reuse your library code later. Also, everyone likes working with separate files more because it keeps things more organized.
That said, it's also best to give the user one compressed file so that everything can be cached easily, and this also reduces the number of page requests. Rails 3 does this automatically in the asset pipeline, for example. You can write a script to run your favorite compressor. But you shouldn't sacrifice code readability for this -- you can have your cake and eat it too!
