The family that stays together, learns to hate together lol. I highly recommend separate rooms. Too much family togetherness.....especially after a full day together in the parks....can lead to grumpy people. There's nothing better than being able to go back to your own room and distress from the day. We did a trip with 12 of us and had a 3 bedroom suite....there are still a few family members I look at with stinkeye.
Tom
It depends on your family dynamics. We did a suite at the Doubletree Guest Suites with my family a few years ago, and it was ok, but I don't think I'll jump up and do it again anytime soon. Granted, we would need our own suite to accommodate our family size at this point anyway. Although I think if it was a situation where someone in the family was paying for most of it, then I could deal with sharing space to a higher degree. For that particular trip, my parents were paying for the whole thing, which made it more tolerable.
Alternatively, we rented a house on the beach in the Philippines with some friends more recently, and I wouldn't hesitate to plan a similar vacation with them again in the future. That said, we pretty much had a whole island to ourselves, we had our own bedroom and bathroom, and we paid someone to cook and clean for us, so the overlap wasn't as great. If it had been a situation where someone's "bedroom" had been a living area, as it was during the trip with my family, it may not have gone as well. As it was, we each practically had our own 'hotel room' anyway, but it was more cost effective to share the house and other services.
With 10 people, you're looking at a Grand Villa, or two smaller places. I really think that having the 'living area' as off limits for sleeping is the best route to take with large groups. That way everyone has their own corner they can go off to as they need it, or someone can be hanging out in an 'awake' area during any point of the day. DH and I ended up spending a lot of time 'resort hopping' during our trip with my family, because we needed a break, or if someone wanted to take a nap, we couldn't realistically be hanging out in the room anyway. My nephew came to hang out with us one day, and since everyone else was napping, I ended up taking him to wander around the hotel, because there wasn't a better option if I wanted to allow everyone else sleep. That's not ideal with small children, so it would have been nice if there had been an area of our "room" where no one was sleeping where I could let him play.