multiple branches or multiple repositories

We're in the process of converting the LilyPond CVS repository at savannah.gnu.org to GIT. One of the questions we need to deal with, is how handle modules.

There seem to be two approaches:

  - for each module, create a separate git repository.  Inside the 
repository, each subproject has its own branching

  - put each module as a separate branch in a shared repository.

I think the first option is the most natural one, but are there any issues, besides namespace pollution to the second option?