Splitting the group is a fundamentally bad idea, both in terms of reprecussions, and the administrative issues that would come along with it. What if for a month I got busy, and decided I couldn't or didn't want to submit, but then for the next two weeks, I felt like turning stuff in?
Would I switch back and forth between groups?
Then we also loose the advantage of diversity, with two different groups. If I'm in one group, and Chaos is in another, and I like his story and want to keep up the critiques on it, I can't; which means he just lost a potential reader and someone who WANTS to keep critiquing his work.
Working on semi-spontaneous weekly submissions gives everyone a fair chance to get reviewed, and anyone who has the time to submit, should have the time to review - so the sumbit/review ratio remains at a rough 1:1 (AT LEAST). It more easily fosters the "I want to be a reader" people as well; technically they're members of the group, just ones that don't submit (and when they do, they'll be first up!).
Points are nice, and everyone trying to adjust the cycle frequency to their schedules is to be anticipated, but they can't work: the first takes faaaaar too much administrative back-end, and the second... blegh. The weekly opt-in requires very little: enough to maintain the current list, as well as deciding how many people can submit weekly, and picking out people who should get priority based on submissions.
VOTE THE AVALON METHOD!