I agree that we have to distinguish whether it's just keeper or dynasty. I'm currently in 1 dynasty league and our rules regarding prospects:
1.) you can pick up anyone not in the majors at anytime but they have to be in your starting lineup.
2.) you can only place them on your bench if they were on your team the previous year or owned by someone else and then dropped.
I personally like those because it prevents people from hoarding so to speak. I'm cool with either way keeper or dynasty. I like the sound of having it reflect a MLB roster with 25 spots, 40 would get way to thin especially with 16 teams.
Looking for 2011 Topps Tribute Black Refractors #'d/10: 69/100 so far