You should define your partition by what makes sense for your domain. i.e. if you deal primarily in year quarters, create 5 partitions (4 quarters + 1 overspill).
You should also take into account physical file placement. From the MSDN article:
The first step in partitioning tables
and indexes is to define the data on
which the partition is keyed. The
partition key must exist as a single
column in the table and must meet
certain criteria. The partition
function defines the data type on
which the key (also known as the
logical separation of data) is based.
The function defines this key but not
the physical placement of the data on
disk. The placement of data is
determined by the partition scheme. In
other words, the scheme maps the data
to one or more filegroups that map the
data to specific file(s) and therefore
disks. The scheme always uses a
function to do this: if the function
defines five partitions, then the
scheme must use five filegroups. The
filegroups do not need to be
different; however, you will get
better performance when you have
multiple disks and, preferably,
multiple CPUs. When the scheme is used
with a table, you will define the
column that is used as an argument for
the partition function.
These two articles may be useful:
Partitioned Tables in SQL Server 2005
Partitioned Tables and Indexes in SQL Server 2005