Is this OLTP or data warehousing?

For OLTP on SQL Server 2008 there's still justification for setting MAXDOP to 1. Ideally you shouldn't have any OLTP queries needing multiple cores, and if they do this option will stop them killing the server though their individual performance may suffer. With data warehousing and from SQL 2008R2 on this may not be the best option.

I don't like the idea of allocating cores to instances because if you are running Active/Active then the best use you can get from the CPUs is the sum of the allocated cores on a node, potentially half the cores which is a waste.

Using MAXDOP = 1 and monitoring CPU load would be my prefered option.

Cheers

Leo