One fundamental issue that has been missed in the recent explosion of J-blog argumentation on James Kugel and the Documentary Hypothesis is, which fundamentals of Judaism are at issue.
I've had arguments with DH proponents in the past, on various mailing lists, and one point which has been made quite clear to me, is that those who argue for DH are not taking issue primarily with the Eighth Maimonidean Principle (the unitary nature of the Torah and primacy of Moses' prophecy), nor yet the Seventh (primacy of Moses' prophecy), but in fact the Sixth (existence of prophecy).
Denial of the Sixth Principle is a faith position, just as much as assertion of the Eighth Principle. There is no hard science to prove either one, there is only the assumption of the truth or falsehood of either one. And once one denies 6, then 7 and 8 fall as well. When the Torah is removed from Divine authorship, the only possible author[s] left is human, and then DH becomes possibly the best explanation of multiple apparent threads in the text.
Posters on Gil's thread Considering Kugel complain that:
"...no one - I mean no one - has asked if DH has adequately uniform and consistant answers (as in solutions DH as a discipline could agree on), to the challenges of "bible as literature", to phenomene chiasm, leitwort, acknowleged literary structures in Torah common to the ancient M.E. that show disregard for their JDEP divisions, the analysis of the tanach.org scene, R. Yoel Bin-Nun, Herzog Teachers Institute (which has published work from observant AND believing Biblical Critics like Israel Knohl). Nothing. Not even on the historical conservative approach thats revealed the indications of Divine Encounter and the human in Torah found in the mesorah from R. Abraham Heschel in his Torah Min-HaShamayim (recently in english as "heavenly Torah"), the suggestions of R. David Halivni, or even some words from the Biblical Criticism-friendly orthodox rabbis being alluded to. no one brings any of this to the discussion."
But that doesn't answer the fundamental question. As has been explained to me, the academic consensus BEGINS with the rejection of prophecy. After all, the supernatural has no place in academic discourse as a causative agent. So it doesn't matter. Bring in all the literary arguments for single authorship that you like, you still won't convince the DH proponents that the Torah is MiSinai (TMS). At most you can demonstrate the plausibility of single authorship, but that will still be single human authorship. The posters fall into the usual trap of claiming that DH is the opposite of TMS. But it's not.
As for the various religious Jews who have lost their faith in the Divinity of the Unitary Written Torah, they have all kinds of rationales for their lack of faith, all of which cover up the real rationale - a real loss of faith, which then seeks intellectual post facto justification. Kugel is a rare exception, but even he seems to have lost some element of the True Faith.
As R' Micha Berger says, loosely, the mind is a terrific instrument for rationalizing decisions already reached by the heart, which is sort of the reverse of Pascal's "la coeur a ses raisons, que le raison ne connaît pas," or "the heart has its reasons, of which reason knows nothing." That some continue to be Orthoprax after losing faith in the truth of the Torah, is basically true Kaplanian Reconstructionism - that one continues to practice as an Orthodox Jew even while denying that God communicates with the physical universe. Only one such as Kaplan or R' Yitz Greenberg can truly hold such a position, because it depends on a deep emotional connection to the forms of traditional Judaism, which is pretty much impossible for someone raised without them.
In sum, then, argue DH vs TMS all you like, but realize that they are not actually opposites. DH proponents, consciously or not, assume that prophecy does not exist, while TMS proponents must assume that it does exist. Once one assumes prophecy does not exist, multiple authorship is a (the most?) reasonable interpretation of the textual difficulties of the written Torah. But literary studies demonstrating multiple authorship do not prove human authorship, do not disprove Torah MiSinai.
An afterthought: R' AJ Heschel considers Torah Min Hashamayim and Torah MiSinai to be the same concept, from different viewpoints. From God's perspective, it's Torah MiSinai, because that is where the Torah was given to the Jews, and thus the human race. From our human perspective, it's Torah Min Hashamayim, because it came from Heaven. In either case, the Torah is the record of our ineffable encounter with the Divine.