I would prefer connected land masses like in RDR as opposed to islands. There are several times in V where they show the map of the US and it looks just like it does in real life (maps on computer screens in Zancudo and on one TV commercial at least). One advertisement says the Great Senora Desert is actually 400 miles wide. I think that would have made a great barrier for the eastern side of the map. You drive out too far your vehicle breaks, and if you continue walking you either get attacked by an invincible animal or you just drop dead, presumably from "heat exhaustion". I have not tried it yet in V but I believe it's the same general idea if you swim too far out to sea.
It just makes me wonder how it will work when they decide to add more cities to online. Will they still be isolated islands and you have to use the airport to warp between them, or will they all be present on one giant map? If it's the latter then surely they will have to re-draw the boundaries. If for say Las Venturas is added and would be placed east of V's map, what happens to the eastern coast on the current map (Cape Catfish, etc.)? It will be interesting to see how they work that out, but generally I think with IV and V they have moved toward more believability but the island concept feels outdated and cartoony now. It's good for a game play perspective since there are no unreachable areas, but for world building purposes it's kind of silly.
I came across this map someone made imagining what San Andreas would look like if it were comparable to real life California. I think a similar idea could work for a game. If I had to chose between invisible walls or islands I'd pick the walls. I wasn't really bothered by them in Fallout 3.