Should there be a separate QAE (Quality Assurance Engineering) team for the product development?

Time to time I keep hearing of companies restructuring their 'quality assurance' or testing team as part of quality-enhancement measures. Some say - let's not have a dedicated team of QAE instead just distribute them among the projects/product development teams. Others would say, this might bias them of product features and so to keep them effective in fault-finding, let's keep a separate team of testers.

What is your take on this?

Which way do you think is good for improving quality of the product being developed?

What are the pros & cons of two methods?

Do you have any other remark / experience to share?