Dim,
as olivS said in his edit to his post, he was not completely understanding the technique when he first wrote it. In fact, I can’t get the same effect by pressing “set smooth” on the different sets of faces when trying with a cylinder, I don’t really know why. Blenderage method is great when you are going to use the model outside Blender, as I said.
The reason for this thread already being discussed is because it is was highlighted in BlenderNation a few days ago 
Instead of pressing the P-Key use the Y-Key to split the mesh. This way you don’t end up with separate objects.
The huge downside to this is though that you’ll end up with additional vertecies and in some game engines you might see the stuff behind the mesh through the seams.
If you go to a 3D programming forum, you’ll be told that today, the bottleneck in the graphics pipeline is rasterization (e.g. textures and other effects that “paint” the poly on screen) and not really vertex transform, so the difference after seperating the polygons will be likely negligible.
Respect of the seams, I differ. As long as the neighbouring polygons share the same vertex coordinates, is waranteed that no seams will be shown. This is at least mentioned in OpenGL specs. This is not the case if you have two polygons and one has two vertices on the common edge and the other has three. But it is not possible to get that kind of geometry with the Y command anyway.
Enough chatting ;). I’m posting here a program I’m working on. The models were created with a CAD tool, and later converted with Blender. The first image is the program using the original models. The second is the same program using the seperation faces technique. As you can see, the result is much better and the FPS count doesn’t change for the reasons I explained before. (Yes, I know 8 FPS is quite low, I’m working on this 
Surprisingly, the bottleneck here are not the graphics but the physical calculations)
CVS builds have the right tool for this (mark sharp + edge split modifier). Thank you Spiderworm! I just wonder why there’s only sharp and no smooth option (I have the same problem in XSI). Does it have any technical reason?
Hi, I’ve just posted a (very brief) tutorial on the mark sharp + edge split combination at http://blenderartists.org/forum/showthread.php?t=83816 (the shape used is … erm … “derived” from the shape in this tut, sorry blenderage 
).
I’m not sure quite what you mean here. There is an option to clear sharp, if that’s what you’re looking for.
Artificer
I mean to have the opposite marking possibility. For example you use edge split with an angle of 30 degree and want one 32 degree edge smooth. There are still some stuff missing: making sharped edges anyhow visible for better editing, behavior of edge smoothing after applying the modifier, etc…
Oh, I see. There’s no major technical reason that’s not there, I just didn’t think of it. I’ll take your suggestion into consideration.
There are still some stuff missing: making sharped edges anyhow visible for better editing,
There is an option to make sharp edges visible (they are highlighted in red) in the “Mesh Tools 1” panel of the edit buttons - just press the button named “Draw Sharp”.
behavior of edge smoothing after applying the modifier, etc…
Not sure what you mean by this. Could you elaborate?
Artificer
maybe in the future blender will incorporate nice cool features like the “smoothing groups” in max, avaible for all editable mesh objects. this is the thing i like most about blender: they are always coming up with some new adjustments, features and basically, updates. another thing that could sometimes be usefull is the “auto smooth” command. with that one, blender makes some sort of smoothing groups, depending on the angles between faces. all you have to do is activate the “auto smooth” button in the “Mesh” panel and choose an angle. Smooth faces with angles below the value inserted will be automatically grouped into the same smoothing group. this will get you smooth surfaces and rough edges, but sometimes you might get some unwanted solid faces.
you can go around the problem by adding extra edges i guess. as far as i know, xsi also lacks the smgr feature. but if you think about it, in real life you don’t have “seams”. in my opinion smgr are only used for mobile platform games like the ones for the iphone or nintendo ds. as for low.medium poly art, just add extra edges to define the curvature.
‘smoothing groups’ and ‘editable mesh objects’ are terms/techniques from 3DS Max that are not applicable to Blender. Blender and other 3D packages have much more elegant and simpler to use solutions.
…or you could just use the edgesplit modifier
NOTE: during mesh conversion flat faces and parts of different materials are edgesplitted automatically 
I always wonder what the difference in performance when I render a model with severall smoothing groups or edge slpit modifer applied (not in BGE)? I was thinking that maybe a models after smoothing groups will require in general less DIPs (draw index primitives) than edge slplitted model?
SWEEEET. This is what I’ve been bangin my head on my desk about… Now I can take some Motrin. thanks for this post… Where do the lines go in edit mode hitting P, the lines stay if you hit Y.