I use lookup tables a lot and ALWAYS keep them separate, even if some only have a few rows in them... but how badly does this effect DB performance?

There is...

That's what I thought too 

Table 1 is a single column table has the values 1,2,3  (I'm assuming: Column is called A)

Table 2 is a single column table that has the values 3,4,5,NULL - (I'm assumping:...