Separate compilation of submodels applies only to version 4. It was dropped from version 5 because it was difficult to use and was made obsolete by general improvements to the speed of code generation on version 5.
Complex models — that is, models with a large number of symbols and equations — can take a significant to build (i.e. generate the program for simulating the behaviour of the model). It can be as long as 10+ minutes for a complex model (100s of equations) on a slow computer.
Normally the build process is done with the whole model, and every time you make some change, no matter how small, it has to be done again before you can run the model. However, it is possible to specify that a submodel is built separately (in technical terms, a separate DLL is generated for it). This greatly speeds up the re-building process for any changes made to this submodel, since Simile has only to re-build the submodel, not the whole model.