K. Chow,
The use of VLANs have a minimal amount of overhead. However, large networks that don't utilize VLANs can lose upwords of 20-50% of their bandwidth capabilities without the use of VLANs.
One thing to remember, VLANs are switch specific, by this I mean that all VLANs do is group ports within the same switch together.
Now, if we expand that thought to include more than one switch that we want to share VLANs/Data between, we have to use trunks. Now the use of trunks have their own overhead. ISL trunks use an encapsulation method that adds 32 bytes of data to every packet. To see this in context, if every packet you sent was a 64-byte packet and you were using ISL trunking, you would effectively lose 33% of your bandwidth capabilities just by turning ISL trunking on. The chance that all of the packets in your network are 64 bytes is not realistic, however if you implement dot1Q trunking, it just sets a flag (VLAN tagging) within the packet itself.
Th use of VLANs does create overhead, but it has positives and can reduce the overall amount of latency or traffic in your network. This really depends on the design of the network and how much traffic you are pushing. Let me know if this helps, or if I can provide more information for you.
