We develop with Visual Studio 2010 (in C#) and migrated a while ago from SVN to GIT. Now we try to split up our repository (which is quite big - ~30.000 files) to many git repos
Use one submodule to house all "common libraries". Just one level. But you should move the common libraries as services with well defined contracts. This way you can incrementally rollout new versions with no down time. This way you only have a submodule in each that holds the contracts. These could be interfaces or messages.