I'm a bit confused by those replies.

David - If the system has to be up and running when it's needed, then is that a non-critical system?

Antares:

a) Scenario 2 isn't necessarily a customer system?

b) I don't follow your point about downtime and troubleshooting being a waste of time, energy and resources in the context of making some changes on either the live or the development version.

By the way, how do you guys copy your changes from the development to the live system? Do you have a system in place to do it? If so, how do you manage changes to that system?

I should say that I'm not advocating any approach, I'm just asking a few questions - hopefully to try to get a discussion going.