The University of Arizona Library has been functioning as a team-based organization for many years. Anecdotally, I have heard both good and bad things about it - but it is an intriguing idea. Many articles have been written about their experiences including:

• Diaz, J.R. and Pintozzi, C. 1999. Helping teams work: lessons learned from the University of Arizona Library reorganization. Library administration and management 13, no. 1:27-36.
• Bender, L.J. 1997. Team organization-learning organization: the University of Arizona four years into it. Information outlook 1, no. 9:19-22.

A more theoretical perspective was recently published on the topic, though I really haven't been able to process my thoughts about it yet: Edgar, W.B. 2007. Toward a theory of university library group work: an approach for development. Journal of academic librarianship 33, no. 2:268-275.

A recent report out of the University of Minnesota Libraries highlighted a different approach: "In response to the increasing importance of interdisciplinary research in the sciences, the University Libraries have hired three science librarians who work together as a cohort on special projects... despite residing in different libraries across the University of Minnesota-Twin Cities campuses. The three librarians... work collaboratively to forge relationships across the disciplines and to work work on projects that are expressly interdisciplinary." (Understanding research behaviors, information resources, and service needs of scientists and graduate students: a study by the University of Minnesota Libraries, Final Report, June 2007, http://www.lib.umn.edu/about/scieval/)

More food for thought...