I like the rolling proposal, but I see no reason why it _must_ continue to get automated updates from unstable when testing is frozen.
I think it would be perfectly acceptable to let the rolling version freeze along with testing when a new release is being prepared.
if these freezes are long enough to cause real grief for people using rolling, then it probably means that the freeze was declared too early.
I don't think that you need upgrade instructions from one snapshot to another, the upgrade process is just the normal apt-get upgrade that you would do between snapshots. The value in updating the snapshots on a regular basis is that it will greatly reduce the number of packages that must be downloaded after the install to bring the system up to date.
I also think it's reasonable to state that packages in testing/rolling must be able to upgrade themselves from any previous version that was in testing/rolling in the last X months (where X is a relatively small number 3-6 for example) as well as from the last -stable release rather than requiring that packages be able to upgrade themselves from _any_ prior version. If someone isn't doing an apt-get upgrade at least every 6 months, they probably don't really want the rolling distro anyway.
I'm not saying that it's good to have packages that can't upgrade from some prior versions, just that it shouldn't be a show-stopper requirement to do so.