I've worked quite a bit with the OS Street View and OS Vector District data. I have relied on Mosaic datasets for the OS Street View data and I found it very easy to do with mosaic datasets. You should be able to put it into a Raster Catalog, but if you are using a different projection for the dataframe be sure to use the Petroleum Transformation.
I would say that you are not wasting your time, just it would be much easier with ArcGIS 10 and mosaic datasets. You might want to mosaic the images first to meet the National Grid Reference Squares, this would give you less images to add to the Raster Catalog. It would be fairly easy to set up a model to do this.