You may want to look thru these to documents...
Create Cache and TPK without ArcGIS for Server - Workflows for Desktop users
Publish a Tiled Service to ArcGIS Online w/o ArcGIS for Server or Utilizing Your Credits
From my recent experience, creating a mosaic dataset and using the Image Server Extension for createing a cache allowed me to add an additional 4 scales (14 LODs instead of 10) and reduced the amount of caching time from 8 weeks to about 10 days. To me that alone makes it worth it. PLus other functions can be used with services for things like hillshade, slop, aspect, and other byproducts of raster/mosaic datasets can be used in services on-the-fly and not be cached. I have not done this yet and do not have a good list of these other functions, but that is promising for us. However, the cost is a chunk of money, so you have to weigh the options.
Mosaic data sets to services will allow you to take data from different coordinate systems, and produce a single service without having to reproject or duplicate the data. However, if using it for a base map, I would probably still cache this....that is my preference. we have about 2TB of imagery.
Other links that are helpful (sme links are still 10.2 ...copying and pasting from another doc):
Key concepts for Image Services ArcGIS for Server (Windows) - Key concepts for image services
image management guide book Image Management
ArcGIS Image Management Workflows (AGOL listing)
http://www.arcgis.com/home/group.html?id=b65f2601e0084e32afab3eb488fa8a67
Imagery community and blog
Imagery | ArcGIS Resource Center
imagery script (from AGOL…zip file)
http://www.arcgis.com/home/item.html?id=08a57579df294f569906cee1c69381a6
(....I need to reread these myself!)
Hope this helps.
