In no particular order:

For walls I model the exterior as a continuous group (balloon framing) making any different material a different group. The interior face of the exterior wall can later be 'painted' a more suitable material. By the way, although I generally like keeping each group a distinct material it's not a big deal to mix them as you can -- in the above example -- select the interior material, right-click, and choose select all with similar material. Even with 2 materials this keeps the exterior wall mesh unified for easier adjustment if needed. If someone has a better way I'd love to hear it, by the way.
For interior walls I do per-floor wall groups. Stairs are treated no differently -- they are usually a combination of exterior and interior walls -- so the exterior wall will stretch continuously while the interior wall will be split by the floor. Obviously there will be exceptions, but this is generally the route I take.

As for showing electrical only, mechanical only, etc., I would just place these on there own separate layers. The scene views can be very powerful and perform like a filter would. Instead of using scenes to locate the camera, you can turn off the camera location of a scene and instead have it save which layers are on/off, which objects are hidden, where sections occur, etc. So you might have a scene called "electrical renovation" to instantly show the applicable layers and conveniently hidden geometry.

Also, for setting layers -- be sure to leave the actual objects/meshes on layer 0 and only move the parent group/component to the layer, otherwise when you turn off a certain layer you might unknowingly turn off nested geometry.

The last two tips I have would be:
start setting EVERYTHING to a shortcut as you start to use that command. It can be a really pain in the ass -- and really slow you down -- to have to dig through menus. Sketchup was designed to be using shortcuts.
Use the 'hide rest of model' command (set to a shortcut when editing groups/components to make it MUCH easier.

I completely agree with Boofredlay that you should start out with something simpler to get accustomed to SU before modeling a whole, detailed house. Having said that, here are a couple of thoughts:

Sketchup uses groups more than layers -- Group every object that you would like to have distinct from it's surroundings (nested groups are fine)
Components are a way of instancing copies of a thing. If you want the exact same object throughout the model use a component (windows, light fixtures, stair treads, columns). The benefit is that if you edit one of these they will all be identically updated. Use groups for organizing more variable information.
Use layers for different sets of things that you would want to have displayed independently of one another, such as phases of a project, mechanical/electrical systems, furniture, landscaping, cars, etc. This is much less important than groups, but it will allow different options of things in the same model as well as improve cpu performance (by not having to show things like landscaping while modeling the windows of the house).
I have never met a planning department that will accept 3d (or even 2d digital) drawings to permit anything. You will need to come up with a printed set of drawings which leads to...
Don't use sketchup for everything. It is great at modeling but bad at things like renderings and detail drawings. Use a dedicated rendering program (I prefer Thea or it's free counterpart kerkythea) and CAD drafting software (AutoCAD is the standard but there are plenty of options -- some free).

Good luck.

I'd try to start eliminating what causes the errors.

Turn off 'hardware acceleration' and see if that fixes it -- if it does it's likely the video card to blame.
If not try disconnecting the second monitor (hardware acc. can be back on if the first test founf the gpu to not be the problem).
After that ?

Thom, which card did you get? I'm just about to buy a new ATI card and now you have me reconsidering.

The i7 looks like the system to go with, turbo-boost will eliminate the slower speed when using a single core (which SU is) and more ram will be useful. I haven't kept up with mobile processors so I don't know which gen that i7 is, but the newest intel cpu version has JUST been released (goes on sale this Sunday) and (I've only read about the desktop line but I assume it carries over to the mobile selection as well) is about 20% faster and uses less power. Something to look into.

@ Brodie

I've always heard that SU doesn't like AMD/ATI cards, but I've never come across this, despite having a mobility 9700 (ATI) card in my laptop for the past 6 years. I've always had good performance and no problems. Do you know if this is only a problem with VERY low-end ATI cards or is it merely a thing of the past?

Has anyone had a problem with the last 2 generations of cards (5xxx/6xxx) and sketchup? I've always assumed this is just no longer an issue.

Hold down 'alt' when you have the paint brush selected to switch to the match paint dropper. Select the first face and then paint the other faces to continue the face without the texture 'starting over'.

I'd have to search for the article but I recently read that dual monitors set at different resolutions use considerably more power (like 63 watts and 11 deg. C in the example they used) than 2 with same resolution.

[edit] here's the article (I'm not sure if the result is due to the graphics card or not):
http://www.tomshardware.com/reviews/geforce-gtx-570-gf110-performance,2806-2.html

I had assumed the general direction could be found by which vector direction had the longest cumulative length, or maybe the direction of the longest unbroken single edge.
I haven't tried it but the texture helper plugin looks pretty useful.

I was wondering if someone could make a plugin that would align textures to the surface that they're on. I was thinking it could be something where you select an edge of the surface and the texture would be rotated to align with that edge. It would be cool if there was also an option to let it auto-find the major orientation of a surface and align in that way.
Is this something that's possible? Difficult? I think it would be most useful for correctly orienting wood grain in beams, studs, furniture, etc. These are generally fairly regular geometries so maybe that would help.

About driver upgrades -- they do matter, but for specific software, not (usually) all around.

When the Nvidia's FERMI line first came out they were reviewed as being not very good (too hot, too much energy, and no real increase over AMD). After a couple of driver updates FERMI is considerably faster than their AMD counterparts (GTX470 > 5850, GTX480 > 5870, etc.)

These are usually targeted at specific programs, games, where they've been able to noticeably improve performance.

I've always considered a PC to be more of a hobbyists computer. You can argue the OSX is a better (read, easier to use) OS and that the case looks nicer. These are reasonable considerations and I might even concede that the ratio of users should probably be the reverse of what it currently is (~85% pc vs. ~15% mac) if only because the average person probably doesn't demand very much from a computer (what do you actually need to browse facebook at the local Starbucks?) With that in mind, better looking case and (arguably) more accommodating OS should be more common.

My problem with Macs is that you have the computer that you get and that's it. You pay a premium for a good quality machine and it's a closed system. A PC, on the other hand, can be bought from Dell or HP or (better) built part by part. This is where the hobbyist part comes in. You can choose exactly what components to use -- where to spend money and where to save. How to set up the cooling, overclocking, etc., and when it starts to get a little long in the tooth you just upgrade certain parts. You can expect certain core parts to survive several years/systems.
I imagine the enjoyment of this is similar to people that would rather fix up a cheaper car to be something really awesome than buy a BMW.

My only day to day use with an apple product is my ipod which I love/hate. I might be wrong, but I imagine this is indicative of apple as a company in general. It generally does what I want, is small and unobtrusive but is so controlling. Only certain file types, it has to be used with itunes, it can't just connect to any computer. Why does it have to be a good package that is so restrictive? Why not just drag-and-drop whatever file types instead of having to use their organizing software.

Finally, is it significant that bootcamp (or whatever) is so popular, just to run windows programs but there is no demand for the reverse?

John Carmack (Quake series, Doom series, and the upcoming Rage engine) chose to use openGL rather than Direct-X -- that's saying something. Also, Call Of Duty series and Far Cry are notable games/series using openGL.
OpenGL appeals to me (as an end-user only, I know nothing about programming) because it's free, non-proprietary, and is managed by the Khronos Group who also manages openCL. And openCL seems much more significant, at this point, than openGL -- using the graphics card to significantly speed up general computation. At this point it's CUDA (which is arguably better, at the moment) or openCL -- free and works on everything or proprietary and only works on Nvidia hardware.
I realize this is a convoluted and indirect reason to like openGL, but I want the software to succeed that's not owned by a private company that gets to dictate what hardware we have to buy and who can use the software.
Besides, have you seen smallluxgpu (openGL rendering program)? Tell me that's not awesome.

Two good sites for listening to something interesting while working:

Radiolab
This American Life

I would agree with Brodie generally, but recommend something slightly differently.

I was going to find an example on the Dell website but they don't seem to offer (at least where I was looking) the hardware I was thinking of. I've been researching a similar rig for myself. Here's what I would look for and why:

CPU: i5-760 (~$200) or i7-870 (~$280)
It would generally be hard to notice a difference between the two except in programs which use as many cores as possible (sketchup only uses 1, though, so for just that save your money and get the 760). If the $80 isn't a big deal, the 870 is a very nice processor (for renderings, especially). Having said that, Q1 next year intel is releasing a new line of processors (the 2500k is the processor I'm thinking of) that should be about (from early testing) 20-25% faster for (speculation) about the same price. It's not a long wait and might be worth it.

Memory: If you want to use a lot of textures and/or if you would want to do renderings also, more matters. If it does, 8gb would be nice and 4 otherwise. The processors I've listed are "dual-channel" and work best with 2, 4, or 8gb. If you got an i7-9xx (triple-channel) make sure you get 3, 6, or 12gb.

Graphics card: If you are really only using it for sketchup a 310 is probably just fine. Certain types of rendering (the future of rendering, I was say) need a powerful graphics card and the 310 might be a bottle-neck. A GTX 460 1gb (~$220) is probably the current best performance for the price. A pair of these are VERY powerful -- just make sure the motherboard supports SLI. Also, if you (read: your son) would ever play games this would be much better.

A quick search found basically the above -- of course, you would have to assemble it yourself. Also, the 2 video cards would be chopped to 1 and I'd upgrade that 1 to the 1gb variety. The links appear to be out-of-date but prices be about that.

**Processor - Intel i5 760 $209
Motherboard - BIOSTAR T5 XE CFX-SLI (don't laugh, read the reviews first) $134.99
http://www.newegg.com/Product/Prod [...] 6813138162
Memory - OCZ 4GB (2 x 2GB) 240-Pin DDR3 SDRAM DDR3 1600 (PC3 12800) XMP-Ready Rev.2 $94.99 (Before $20 mail in rebate)
http://www.newegg.com/Product/Prod [...] 6820227503
Graphics - 2 X Galaxy 60XMH6HS3HMW GeForce GTX 460 (Fermi) GC 768MB $359.98 (before $10 mail-in rebate per card)
http://www.newegg.com/Product/Prod [...] 6814162058
HDD + Power Supply : Samsung Spinpoint F3 + OCZ Fatal1ty OCZ550FTY 550W $99.98 (before $20 mail-in rebate)
http://www.newegg.com/Product/Comb [...] mbo.466067
Case - Antec 300 $59.95
CPU Cooler - ARCTIC COOLING Freezer 7 Pro Rev.2 92mm Fluid Dynamic CPU Cooler $35.98
http://www.newegg.com/Product/Prod [...] 6835186134
Optical Drive - Sony Optiarc CD/ DVD Burner $17
http://www.newegg.com/Product/Prod [...] 6827118039

Total (Before Shipping/Rebates) - $1011.87
After Rebates - $951.87
After Shipping - $998.87

GRAND TOTAL (After factoring mail-in rebates & shipping) - $998.87**

This might be better asked at the thea forum, but how do you cast shows on the "ground" of an IBL background?

I found another -- simple -- way to do what you (I think) want.

create the road as above, and use the extrude line plugin to pull the edge of the road down through the terrain. Intersect and remove the terrain and drop the road down to the desired level. You can even keep the extruded lines to establish some amount of base to the road.

the extrude line plugin

To place the road on the terrain do the following:

Make a profile of the road you want
use the follow-me tool to create the road
place the road over the 3d terrain
use the stamp tool to create a level surface
lower the road to the terrain
done!

There might be complications depending on elevation changes of the road but I forgot to try that. This is a start, at least.

Are you willing to build this yourself or how much choice do you have in deciding which parts you get?

About the CPU, here is a comparison of the i7 965 extreme and the 950 (I couldn't find the 960 but assume the 965 should be better) and there isn't much of a gap between the two. If it's much of a price increase I'd say you'd get more for your money elsewhere.
Incidentally, that is a good place to compare different CPUs and GPUs.

For the case, there are better options. If you want a nice case (good looks, noise reduction, and good ventilation) the Antec P183 would be my choice. If you want something cheaper, but still pretty nice (good ventilation, slightly cheaper build) the Antec 300 illusion would be another way to go (personally, I would cut the wire to the blue lights as they look a little 'gamer' to me -- aside from that it's a pretty clean looking case). The Sonata seems a little generic with no real functional advantages.

For the graphics card, the 470 is a very good card, but also very loud and runs very hot. The 460 is not much of a drop in performance but does much better than the 470 for heat and noise. If you need more power down the road, add a second (just make sure you get a motherboard that supports this if you think you might want to do that at some point) and 2 460's beat a 480 by about 25% on average (see my previous post).

For storage the Samsung Spinpoint F3 seems to be the way to go (for speed, at least).

As far as CPU cooling -- I think this is a good idea. If you're investing thousands on a system spend 30 bucks and get a quality aftermarket cooler. If you ever want to overclock -- great! but even if you don't the 1366 chipset runs hot and it can only help the lifespan of the system to get one. The Cooler Master Hyper 212 Plus seems to be the best for price/performance (at $30) but most any cooler should be better than the stock cooler. Here's a list comparing various coolers -- this is based around the 1156 chipset but most of these (the 212, specifically) will work for 1366 as well.

In case someone's not familiar with them:
1366 = i7 9xx family of processors
1156 = i5 7/8xx family

I hope I'm not overwhelming you with information but this is something I've been researching for a while for when I can afford a system.

If you can wait a couple months it might be worth doing so to get the upcoming intel processor (Sandy Bridge) which looks considerably faster than current gen.

From the referenced article:

@unknownuser said:

Clock for clock however, Sandy Bridge seems to offer a 10% increase in performance. Keep in mind that this analysis was done without a functional turbo mode, so the shipping Sandy Bridge CPUs should be even quicker. I'd estimate you can add another 3 - 7% to these numbers for the final chips.

As for the graphics card (which I don't know how you can overlook a graphics card after you've seen GPU rendering examples -- including the free smallluxgpu) I would highly recommend the GTX 460 (around US $200/$230 for 796MB and 1000MB flavors) which is fast and relatively low noise/power.

At least... this is the route I'm taking (soon).

I'm not sure if this would solve anything for you or not but SU8 now includes solids (not sure if other programs will read them as such or if it's just a SU attribute, though).