I'd stick with your current system. In this situation, having isolated images gives you a lot more flexibility. It might cost you some more time doing updates and installs, but it will be worth it. And that's mostly stuff that you can have going in the background while you do other things, so if you manage your time well the time spent on that should be negligible.
Also, it's probably a good idea to keep your images on their own disk or at least on their own partition. If you do that it shouldn't have any effect on fragmentation on the rest of your system.
