Executive Summary *
If you intend to hang it of a radio mast somewhere out there or for a bussines use the embedded install.
If this is a box in the cupboard or celar, do a hd install to CF. and buy a 256MB or larger CF and not create a swap partition.
Detail *
Yes you can do a normal HD install onto a CF card which is in a IDE-CF converter.
This means the filesystem is mounted RW normally. So if you reset the box it will perform a fsck on the volume. If you create no SWAP and you have 128+ MB ram this should work fine. I run my testbox this way and the Kingston ValueLine 512MB CF card has not failed yet. It's been a year.
When the CF card will start failing I cannot say as most modern cards have a defect recovery mechanism that is so good that by the time we notice disk errors we can pretty much confirm it is shot.
When you use a CF install the filesystem is normally mounted read-only and is mounted rw only for config actions or firmware upgrades. Yes you can replace binaries on a embedded system by mounting the CF rw by using /etc/rc.conf_mount_rw.
All the variable data that is created in /var or /tmp is on a memory fs. The rest is all read-only.
The rrd data is saved to a TGZ file on the config partition of the CF and restored on each reboot.
That said, memory cards these days are pretty good, and so cheap that replacing them is easy. A recent test by the magazine c`t tried to break a USB memory stick but it still did not fail after 40 million write actions. If that is anything to go by it is unlikely to fail in our lifetime.