Bringing the Linux kernel or any non-web development project into it is comparing apples to oranges.

The Linux kernel is particularly misleading because large parts of it are structured to maximize performance at the expense of everything else. When you are looking at OS level code that is called hundreds or thousands of times per second, every processor cycle counts. The primary limitation of a web application tends to be either the pipe or the database, not CPU usage.

This means that the primary concern for inline vs functional code should be one of readability and maintenance. My experience has been that inline code is better for simple pages. But once you reach a moderate level of complexity, function oriented code is better.

As long as your code contains few conditional lines then the inline code style is often easier to read because it puts everyting in front of you in order. But once you get a few conditional chunks of code in there, particularly ones that span HTML chunks, a functional design will be easier to follow.

Jay