Using  DNN, I am building base classes and  all infrastructure pluming, LINQ to SQL objects in separate project(which are shared by all modules), however I reference DonetNuke.dll and use quite a few references in that project.   I just thought it will be cleaner and more convenient  to have separate DLL rather than having all my code in APP_CODE under DNN.  Though, I coming across the need to  pass extra parameters from DNN , I am wondering base on once experience if I will have any challenges going further running this way and if anybody recommends to port all my code to APP_CODE for any reasons that I might not encountered as of yet .

That is exaclty my reasoning.  So I guess there is not disadvantages using these aproach.