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For my current needs, managing various versions is far more complexity than I am interested in. I process the RAW files with LR and output what I need to PS, print, etc. The risk here is that it assumes that the LR library will be available forever. The XMP files can be written to disk but this also assumes some Adobe program will be available forever to use the info. Obviously neither of these assumptions are true.
When I am done processing a set, I export finished JPG's to the source folder. Basically this is to cover the worst case scenario where the source RAW files are not readable in the future. Although I would not be able to reprocess, I will at least have a usable image that is not dependent on any processing software. Perhaps the direction of RAW vs DNG will become clearer in the future. I have family prints that are more than 120 year old. No software needed to view them. What current file format has the best probability of beating that?