*Maybe* this will help give some sort of insight?
Right now updating win10 is a huge PITA, to me anyway... Part of my problem with it is that it seems designed to happen in the background, so downloading the .esd file [.esd = encrypted .wim file] takes a long time -- much longer than just downloading a 2-3GB ISO -- and often stalls/fails so you have to Retry. There's also no control over the built-in Windows Defender [think Security Essentials] -- there's an update this week, & during the download WD insisted on starting a scan, then Windows Defrag started up, & long story short I was thankful it was a VM because the whole process stalled 3 times, each of which I had to power off the VM, & then I restored the VM from a copy & started over.
The actual update in totally hands-off -- you just have to wait whilst it does it's thing. Afterwards there's loads & loads of old files left on your drive, from setup files to a huge amount of logs to a copy of the old Windows so you can [in theory at least] roll back. Windows Disk Cleanup will remove them -- you may have to find the shortcut in Control Panel -> Admin Tools -- & to give an idea how much garbage is left over, Disk Cleanup typically removes between 20 & 30 GB. Updating builds typically doubles the size of the VM's .vhd [because of those added files] -- I expect there will be lots of folks with limited storage space finding that a problem.
They only release ISOs for the win10 versions that appear if you've selected Slow update frequency. If you've selected Fast, you get more builds but through Windows Update. You can copy the downloaded .esd file before setup is run -- in a running copy of win8/8.1/10 an app I found called: WinReducerWimConverter will convert that .esd to a .wim file -- AOMEI's partition software has a tool [wrongly] called Windows To Go that will extract the start up files from that .wim & write them to a bootable USB stick. I copied that stick's contents, as in backup/restore or disk copy operations, to a physical hard drive. The end result set up win10 Much faster, which was the point of explaining all that -- The ISO route will likely be much faster too.
I expect that Microsoft will release ISOs [they tried withholding them with 8.1 & eventually released them after the uproar], & that installing win10 *normally* could add the hidden recovery partition etc., & that it would get win10 installed faster. If it's like earlier versions of Windows, traditionally upgrading an installed copy of Windows not only keeps most of your software working, but also can result in modified hardware driver setups. If/when new drivers aren't available that's good, but otherwise generally considered bad because the result was more trouble prone later.
SO...
" The problem is they also say that once you update to 10 this way, you can no longer use your restore disks/flash drives that you were supposed to create when your system was new."
You can create recovery USB sticks that do not use the contents of the hidden recovery partition that you might get in a *normal* install -- I say might get because the 2 copies of the win10 TP I have installed [one on hdd, 1 VM] did not create that partition. It might make sense to Microsoft to leave a win8.1 recovery partition in place in case the upgrade blows up or doesn't work properly so you can go back.
"My question is, how do you get back to a CLEAN system in an extreme problem?"
I'd only feel safe with a complete disk image backup, using whatever software you prefer, Paragon, Acronis, EaseUS, AOMEI etc. That's because there are new boot loaders/menus, & potential Secure Boot issues. Maybe too briefly, current hardware has moved to EUFI bios that run a mini *nix OS, they've found several security vulnerabilities with EUFI bios [because it's an OS it can be hacked, have mal-ware etc.], & tightening up that security can have challenging results.
I updated the bios on this rig, hoping to take advantage of better security. Right now I can boot into 2 copies of win7 & one of win10. After the bios update I often had Secure Boot *related* issues that prevented Windows from loading -- win10 behaved better overall in that regard, & what bothers me is that with win10 there was any difference at all. Before win10 all the boot stuff was win8.1, & I'm afraid the win10 TP boot loader **May** be different enough to give some people problems -- it all depends on how the EUFI bios is written. It could be that I'm totally mistaken, or it could turn out to be a problem for some folks, but in the absence of data confirming one way or the other, I feel an abundance of caution is in order.
That all said, I do think that since win10 can run from an external drive, or a .vhd, it might well make sense for some people to try out win10 that way at some point, just to see how compatible it is with their hardware. If Microsoft really is going to release it in a couple of months there may be more rather than fewer initial bugs -- right now it's very much unfinished. The thing I like about running win10 from an external drive is that it leaves everything on the internal drive(s) untouched, so it if doesn't work perfectly, there's nothing to restore or put back. OTOH if it does work just fine, that copy could be transferred to an internal drive/partition to maybe save time if someone wanted. Or just keep win10 on the external drive as a safety net?
Microsoft got their community site working and I did ask. If you have 7 or 8.1 you can upgrade to 10 using either the Windows Update process or download a .ISO file and use it to upgrade. That gives you something that I don't have right now -- a DISK copy of the OS!
If you have win8.1 Pro, same as what Microsoft sells, you should be able to search [Google/Bing] to find the ISO download if you want, e.g. http://windows-8-1.en.softonic.com/download . I used a trick or hack or two [or 3] using the 8 -> 8.1 update before MS released the ISOs, so I don't have a bookmarked link or anything [sorry]. The bad news is that if you've got one of the special versions, like 8.1 with Bing, you might not ever find a fully legal ISO.
More complicated, Windows setup files/disks/ISOs use .wim images -- update/upgrade downloads from MS are typically encrypted .wim files called .esd files. If you use Google/Bing you'll find a lot of info on what you can do with .wim files [if you're interested], different tools, methods etc., or the AOMEI tool can work. When you get a setup ISO, the core of it is a .wim file -- everything else is more-or-less software to put what's in the .wim on disk.
If you've got a recovery USB stick you created in 8.1, if you selected to use the contents of the recovery partition, you have the .wim file for the copy Windows on your hard drive. I'm not 100% sure what you get if you use a USB external drive, whether it can be NTFS or not, but the USB stick will be FAT32, & the .wim file will be split into multiple .swm files. Using a tool called dism you can *Apply* that image to a disk, .vhd etc. It's not an ISO but it contains most of the good parts you'd want/need.
If I lose the base recovery partition as useful in this, I'll probably take the option of freeing up the 10+ GB of space involved.
AFAIK if/when you create a recovery USB stick or drive you can have an option to remove the recovery partition, or at least shrink it. I say "can have" because Windows help says it should be there as an option, but I have seen cases where it was not. It can maybe get tricky if you use partition software...
On the GPT disks common with 8.1, you've got a small partition or section of the drive with data for the main GPT partition or section that holds your files/folders. You may also have a small section with the boot files, & then there's the recovery partition, so a drive may be split into 3-4 parts. IF you've got minimal storage space, you may additionally be running off a .wim file -- Windows emulates the actual file/folder arrangement you expect to see. That *may* make looking at all the parts of the hard drive misleading or confusing, depending in part on how the software you use presents it to you.
Rather than buying the OS, buy another external drive and keep more backups
Currently I'm making 2 assumptions -- 1) that MS will provide licenses at some point very cheap, based on rumors & where MS seems to want all this to go, & 2) using a current key for an upgrade will have gotchas, plus you'll give up the license for whatever you run now that you upgraded. That 2nd is based on what happened with 8 -> 8.1 . One thing I have found out, am playing with this afternoon, is that booting to USB or eSATA is becoming more challenging.
Where I used to commonly use USB sticks & DVDs, I'm beginning to think a full fledged install to to an external drive is the way to go with EUFI bios. It could still store backups & whatever else of course, but the important thing is you shouldn't be up the creek when you find your rescue discs/USB stick won't work.
