The doc library permissions issue is being discussed again in the Sharepoint blogosphere (here and here, with an older post here). Although I generally agree with my fellow Sharepointers, I have to step out and call "Bull!" on this issue. Every "solution" which provides an alternative to item-level permissions in Sharepoint is simply a workaround for a severe deficiency in the application. Microsoft SHOULD have included this functionality in the original release and we all know it - can we please stop dancing around the issue and demand the MS fix it in v.next (or, even better, an upcoming service pack)?
Only if their customers make enough noise will MS relent and solve this problem which affects EVERY SHAREPOINT IMPLEMENTATION. Stop listening to experts who act like they are imparting some mystical wisdom with talk of "metadata" and "views" and "subareas" and demand the following:
1. Item-level permissions for all list types
2. Folder-level permissions (or, as an alternative, nested document libraries)
3. The ability to move docs from library to library AND retain the metadata
4. A Windows Explorer style view for all libraries (that means a complete folder hierarchy not just a single-level view)
Only if you - the customer - make this an important issue will it get resolved. 'nuff said.