Ryan - here's something along those lines to keep you occupied for a while:
http://fontstruct.com/
The solution to modular fonts is simple: Don't make them modular. You can limit yourself to so many pieces, but still, for a good result, small changes, optical or not, always have to be made.
Of course it's easier with a display type such as used here, but I agree that the smoothness is a bit lacking.
Reading text is simple because of repetition, but that doesn't mean you can't tweak repetition, this is what brings character to your type. Of course it's a very good way to start, with Fontstruct being a very nice stepping tool for a quick experiment before trying it out for real.
The thing I like about a modular typeface is the creative solutions (at least often enough) within the limited possibilities. Since they quite often play with the relations of the letters within the alphabet to each other instead of just being a copy of what (for instance) the basic latin alphabet is.
I believe, the trick to making a good modular font is making it immodular. During, or after you've assembled your segments, run tests & make notes. If something looks wrong or feels uncomfortable, it's wrong. Go back an tap those arrow keys until it feels right. Use the force. No measuring allowed. These small adjustments, will in turn make other glyphs look uncomfortable. Spacing should rarely be modular. For example, there's no formula for spacing an L or T. It's likely that the best sidebearings won't land on grid lines. Through repeated testing, note taking and arrow key bopping, your modular font will look balanced and it'll have less of that amateur font appearance everyone probably would prefer to avoid.
I dedicate this song to Nick Curtis, the most important thing in my life:
You are the sunshine of my life
That's why I'll always be around,
You are the apple of my eye,
Forever you'll stay in my heart
I feel like this is the beginning,
Though I've loved you for a million years,
And if I thought our love was ending,
I'd find myself drowning in my own tears
You are the sunshine of my life,
That's why I'll always stay around,
You are the apple of my eye,
Forever you'll stay in my heart
You must have known that I was lonely,
Because you came to my rescue,
And I know that this must be heaven,
How could so much love be inside of you?
You are the sunshine of my life, yeah,
That's why I'll always stay around,
You are the apple of my eye,
Forever you'll stay in my heart
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