How could DeltaStreams and Monticello could work together for
managing a core image?

While editing code, or moving something between packages,
interested Deltas would be recording.  Interested Deltas would
also record when a Monticello package was snapshotted.  When
someone else replayed the Delta, they would replay the "package
snapshot" action, by downloading the matching package snapshot
and comparing it to the current state of the system, making sure
that the DeltaStream and the snapshot give the same result

Similarly, when the snapshot is loaded, all changes to that
package before the recorded snapshot could be marked
"installed". This use would be harder to support though, as one
can traverse a path and know the end result, but, given the end
result, it is not possible to determine which path was taken.
the second scennario, might be harder though, and also more
error prone

I am thinking of DS as kind of a replayable log, and so could be
a backend for a system-wide logging framework, and it would
record/replay code/package events.  Keith Hodges has such a
logging framework: http://www.squeaksource.com/Logging

Would this work for maintaining the base image?

-- 
Matthew Fulmer -- http://mtfulmer.wordpress.com/
Help improve Squeak Documentation: http://wiki.squeak.org/squeak/808