That'll work for the high side switching case. Now all you have to do is solve the drive level problem. If you decide to go with low side switching, all of the external inputs will have to follow the PIC ground, or you'll have to be certain that it (the PIC) will tolerate inputs held below the ground rail.
Some devices have internal I/O voltage protection in the form of diodes to the supply rails. Cut the power or the ground to the chip but keep the externals tied either high or low and some interesting sneak circuits result.
What I did was put the ground of all the inputs to the drain of the mosfet(low side) so it does follow it(i.e., my ground is really the the drain).
I get confused when you say "below the ground rail" as nothing is below the ground rail. I see what you mean though(it sounds almost like I would be using a negative supply). I think as long as I treat the drain as ground then everything will work?
Yes. If 'the ground rail' is the ground for the entire system, not just the one IC. Your original post about switching power to 'an IC' was somewhat misleading in this respect.
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