A colleague at work asked me why Jews are not buried alongside Non-Jews. He understood why we don't eat with them, but thought those differences should not extend in death and pointed at the cemeteries for U.S. soldiers which have the fallen integrated by battle, not religion. I told him that we are supposed to be selective even about who is buried nearby (i.e., a Rasha not being buried near a Tzaddik), but I was hoping to uncover a reason behind the halacha.
See Sanhedrin 47a with Rishonim, especially Ramban. Exhaustive treatment of the subject may be found in these two issues of דף קשר הר עציון.
A detailed overview of the prohibition by Rabbi Avihud Schwartz
For context, these articles were written shortly after a minor scandal in Israel where someone was exhumed because his family felt it was inappropriate for him to be buried near nonobservant Jews.