I've had yet more discussions in the office about best practices, this time referring to deploying to the 12 Hive.

Here are some hard and fast rules.

• Don't modify out of the box (OOTB) files
• There's always a way around modifying OOTB files...even if it does mean selling a extra step to the Business Users. Just explain the risks of making them!
• You can extend with new files in the HIVE in some cases
• In other cases you can add extend the User Interface Menu Items to add a function to do something similar to the OOTB functionality but jumps to a customised application page etc.
• If you really have to here's
Microsoft take on it
• Create new files in sub folders of each out of box folder eg. IMAGES
• This will make it easier to identify customisations
• Deploy new files via Solutions not manually!
• That way in source control you store what you're adding to the HIVE
• Also means that the process of deployment is repeatable in other environments and also in a standardised way that all SharePoint Consultants will understand
• STSDev makes it simple once you've created your Visual Studio project, just create the folder structure and Build the Project and the wsp will deploy it to the HIVE
• Prevents issues with upgrades to OOTB files
• You can't simply run SP1 upgrade and then re-run your solution as your code is branched from RTM and SP1 may have additional stuff you need to merge back in.

NOTE: My drawings will get better as I get used to my new Tablet ;-)

Phil Wicklund also gives  some more detailed guidance on this.