They paid 250 million dollars for THIS?!

[A Black Falcon]

I'm still an Apogee/3DRealms fan, so the whole DNF saga was definitely pretty depressing... and yes, certainly worse than Rare. :(

How much talent did the various splits to form other companies drain?

Rare has definitely lost a lot of its good people, this is certainly one of the major factors in why they aren't as good as they used to be. I think, though, that just not being on Nintendo platforms is another one. PDZ, Kameo, Viva Pinata... I find it hard to imagine the games not doing better on Nintendo platforms, where a much more natural audience for Rare games exists. This is surely why the rumors mostly put Rare working on Natal stuff now, that's closer to Rare's audience... if the thing actually takes off.

Either way though, I think that there's little question that Rare would be in better shape now, at least sales wise but perhaps also quality wise, if they hadn't left Nintendo. But they wanted to go, and Nintendo had gotten tired of how long it was taking them to make games (and that it was getting progressively longer and longer), so it's their own fault that it happened.