I'm working on a small team that will begin working on a large new project with another small team. The other team is currently working on a legacy system that they have been working on for years. 

The manager has decided that the developers from my team will be rotating every few months to replace developers working on the legacy system. That way the other team will have a chance to work on the new project and have a better understanding of the new system.

I want to know the benefits and drawbacks (if any) of rotating the developers from the project every 2-3 months.

I know that this is a similar question to "Is rotating the lead developer a good or bad idea?", but that question focuses on a lead developer. This question is about rotating the entire team on and off the project (tech. lead for the new project may or may not be rotated -- I don't know yet).

I'm surprised that everybody thinks this is such a good thing. The authors of Peopleware (which, IMO, is still one of the precious few software project management books actually worth reading) strongly disagree. Almost the entire Part IV of the book is dedicated to this very issue.

The software team is an incredibly important functional unit. Teams need to jell to become really productive. It takes time (a lot of time) for team members to earn each others' respect, to learn each others' habits and quirks and strengths and weaknesses.

Certainly, from personal experience, I can say that after a year of working with certain people, I've learned to laugh off certain things that used to rile me up, my estimates as team lead are much better, and it's not too difficult to get the work distributed so as to make everyone happy. It wasn't like that in the beginning.

Now you might say, "Oh, but we're not breaking up the whole team, just moving a few people." But consider (a) how blindly unproductive their replacements are going to be in the beginning, and (b) how many times you'll find yourself or other teams saying, without even thinking, "I really liked X" or "This would have been easier with Y still around", subtly and unconsciously offending the new members and creating schisms within the existing team, even sowing discontent among the "old" members.

People don't do this on purpose, of course, but it happens almost every time. People do it without thinking. And if they force themselves not to, they end up focusing on the issue even more, and are frustrated by the forced silence. Teams and even sub-teams will develop synergies that get lost when you screw around with the structure. The Peopleware authors call it a form of "teamicide".

That being said, even though rotating team members is a horrible practice, rotating teams themselves is perfectly fine. Although well-run software companies should have some concept of product ownership, it's not nearly as disruptive to a team to move that entire team to a different project, as long as the team actually gets to finish the old project or at least bring it to a level they're happy with.

By having team stints instead of developer stints, you get all the same benefits you would expect to get with rotating developers (documentation, "cross-pollination", etc.) without any of the nasty side-effects on each team as a unit. To those who don't really understand management, it may seem less productive, but rest assured that the productivity lost by splitting up the team totally dwarfs the productivity lost by moving that team to a different project.

P.S. In your footnote you mention that the tech lead might be the only person not to be rotated. This is pretty much guaranteed to mess up both teams. The tech lead is a leader, not a manager, he or she has to earn the respect of the team, and is not simply granted authority by higher levels of management. Putting an entire team under the direction of a new lead whom they've never worked with and who is very likely to have different ideas about things like architecture, usability, code organization, estimation... well, it's going to be stressful as hell for the lead trying to build credibility and very unproductive for the team members who start to lose cohesion in the absence of their old lead. Sometimes companies have to do this, i.e. if the lead quits or gets promoted, but doing it by choice sounds insane.
