Well, there's something else to consider I think, and that is what sort of corals do you plan on propagating. I started out with the common mushrooms, zoanthid, softies, LPS, kind of stuff in my display. My frag tank tied into that display had a similar livestock list. Now that I have progressed, I no longer have softies, no LPS to speak of, the mushrooms have become a nuisance in my display, and my zoanthids don't seem to like my new dosing regimen. I'm getting heavy into the SPS corals which require a whole different setup than the more common stuff. The best way to setup a system may be dependent on your cash flow and the type of corals you plan on propagating.
For example I've got an entire 2nd setup, this frag tank will be tied into a 40 gallon breeder and will be primarily zoanthids. I've got a 4' TEK light for it and have no plans to dose, just WCs. I'm hoping that it will be cheaper to run that setup and won't have to worry as much about pristine water. With two setups I can mix and match a little bit which helps counter the issue of a tank crash wiping out the whole shebang.
Heck, I just purchased these 15 gallon frag tanks which I'm gonna be making into a 3rd system, each one of those will hold something different, maybe try my hand at breeding some fish. Again, it will give me the chance to diversify in case something should happen and really don't add a whole lot of cost short of a few x-tra light fixtures but heck thats an easy enough DIY project when you don't have to worry about how it looks.
If you have only one display tank, then you probably only need to tie a single frag tank into it. If the big display crashes losing the frags in a small prop tank will be the least of your concerns. You can counter that concern by giving some frags to friends with a larger system as insurance. I'm holding frags for other people.
