Hogan and Savage in 1988

As we all know, Savage was carrying the A shows post WM4 (and doing quite well, by all accounts).  My question is what happened when Hogan came back; I can't imagine them relegating Savage to B shows, so did they set up separate A tours with Hogan headlining
one circuit, and Savage the other (with a Mega-Powers team-up for a loop or two)?

They did a couple of team-ups, most notably at a TV taping against the Hart Foundation and Honky Tonk Man, but your breakdown is correct.  Hogan headlined the "A" circuit against Big Bossman or other large dastardly heels, while Savage was the "B" circuit against a variety of guys like Andre the Giant and Ted Dibiase and later Bad News Brown.  They did very, very well with that concept for a really long time, relatively speaking.  By 1989 they even added a "C" circuit in shitty towns that normally didn't get shows, with Dusty Rhodes and Ted Dibiase typically headlining.  They even expanded to a "D" circuit when they added high school venues and charity shows, but that was a short-lived experiment.  

Ah, for the days when the WWF had so many babyfaces drawing money that they HAD to split up the house shows to cash in on it.  What a problem to have!