most projects look like what you described. Inside domain package would have a user package where it would have all user related pojos. On dao, service would exist the same sub packages too.
But an organization that I think it's best is to split the packages is this way:
-com.company.project
- users
UserService
UserDAO
User
Role
- cart
Cart
CartService
CartDAO
ShopItem
And so it goes. I saw it for the first time on talk from a guy from Spring Source. I'll try to find the video.
Anyway, I'm working on a project with this strategy for some months, and until now it seems more organized than the traditional way.
If a package, for example users, become too crowded, you can always create subpackages to organize inside it. But for most packages it will be 1 or 2 domain classes, one DAO and one Service. So there's no need for more packages.
Update: I think this is the video: http://www.youtube.com/watch?v=tEm0USdF-70