Does your school separate didactic classes from clinical?

We are in the process of revising our BSN curriculum. Our theory/didactic courses are currently combined with a clinical component. Our dean would like us to separate our courses. We currently don't give a letter grade for the clinical portion. It is pass/fail. I'm interested in what other nursing schools are doing. Do you have separate didactic and clinical courses? Do you give a letter grade for clinical or is it pass/fail? How are pass/fail courses calculated when you have a student apply to your graduate program? We have heard that some schools consider a "pass" as a C so this could really affect a student's GPA when applying for graduate school. Any help you could give me would be greatly appreciated. If you could let me know what school you teach at I would appreciate it. We are doing a survey and I don't want to duplicate results.