Rasputin - 4:33 pm on Oct 25, 2012 (gmt 0)

google will not rank similar content or domains on the same IP for the same SERP

I don't know if this applies in some circumstances but I have conclusive evidence that this is not always the case - two different sites, same IP, same SERP, I can see both on page 1 of the serps right now (not personal search)

scooterdude, my experience is that sites that are not actively worked on just drift into oblivion, especially sites already affected by panda, emd etc, so I think that whether you combine them or not will make no difference unless you also take active steps to 'improve' them (in google terms).