You definitely want to go with option #1. From Questions about version numbers:
Q. What is a "rolling" release?
A. The "rolling" releases are our test releases. They are the equivilant to what
another vendor calls "rawhide". We call them rolling because they are always rolling
along and rarely stable.
They are not meant to be stable. They are not meant to be used in a production
enviroment. They are for testing purposes only. Depending on where we are in our
testing the rolling can be a beta, a release candidate, and for a short time, will
even match a current release.
The development team of Scientific Linux does not garantee that a rolling
release will work. We want to make that clear. Although the rolling releases
might work just fine for the majority of the time, we might also just happen to be
testing some product that does something you don't want it to do.
The rolling option has a much larger likelihood of introducing significant unwanted changes to your systems than option #1 has.
Either way, I guarantee you that Fermilab an CERN aren't doing dist-upgrades to their systems every 6 months. Scientific Linux supports this by making their Security Errata repository available, which includes the security patches for your specific release of SL. They specifically state that this removes the requirement for administrators to upgrade their systems with each release.
From How To Upgrade To The Latest S.L. 6.x Release:
Scientific Linux was designed so that an administrator can easily upgrade their
computer between minor releases.
It is not required that administrators upgrade their release, because the security
errata will be updated for all releases. But there are often features and/or
packages included in later releases that were not available with the earlier
You were spot on about one thing, though. SL is "f*cking great for an Enterprise". :)