I tend to find have similar keywords in one adgroup is far easier to manage than several hundred adgroups for each keyword.
The method I normally use is to group similar keywords with one ad and if I find that one keyword is lagging behind and not getting a high enough CTR, I'll create a new adgroup just for that keyword and experiment with different ads to see if I can improve CTR.
Another method you might want to consider is "Dynamic Keyword Insertion" - This allows you to tell google to simply insert your keyword into the headline dynamically no matter what it is. Do a search in google to find out more...
In terms of relevancy it on your industry segment - I've seen title tags of online fax services ads with local area codes, bookkeepers with local cities, and hot start ups with the company name.
The best thing is to find out what your industry segment is doing - there are free tools that can help you with this. I can make a recommendation if you want to send me a sticky note.
The second best thing is to run 4 ads in parallel and see what your audience likes best.
1. I have found that individual campaigns for each keyword gets very messy - especially when I run kw variations.
2. I run similar kw with 4 test ads running together.
For our products we are able to use a standard model for the keywords that puts 40 to 1000 variations of the keyword together. For example:
Core keywords = silly widgets, sily widgets, silly widget, sily widget, aggressive widget, dog widget, cat widget
Permutated Keywords = red, blue, pink, yellow
I then permutate each keyword so I end up with red silly widgets, blue silly widgets and so on.
Each core keyword will get its own group. (unless very similar like widget and widgets)
"Dynamic Keyword Insertion" - This allows you to tell google to simply insert your keyword into the headline dynamically
That can work well as long as only a few advertisers are doing it. I've seen searches where every ad had exactly the same headline. Keep an eye on your most important searches and make sure that keyword insertion isn't making you blend into the crowd instead of standing out.