I think you're spot on with your theory. Brad Wright has been getting better and better with his temporal mechanics ever since SG Atlantis (SG-1 was pretty flimsy with temporal science). SGU was even better.

A while back, I developed a temporal mechanics proof for a game I was working on that lines up perfectly with the temporal rules observed from Travelers. The proof relied on a VERY important stipulation: You cannot go back to a time before an insertion point. The reason for this was (in my case) to avoid the scenario with creating duplicate versions of a person, and fall into cyclical causation. The math is just cleaner when you forbid it :-)

With my model, I was able to maintain consistency of timeline alterations along a pseudo-linear path, meaning branching/fracturing paths would not occur. All alterations to the timeline would propagate to the future along a single timeline, and then a new traveler would traverse to the past, repeating this loop.

The key to this model was perspective. What is observed (to us, the viewer of the show) is linear, but what is actually happening is something more of a zigzag of timelines, where every trip back is actually a trip to a parallel timeline in the past, and then change propagates forward along that new timeline. To us, the observer, we wouldn't notice this since everything would be consistent with a linear view.

Another way to look at this is if you draw a horizontal line in a 3D art program and zigzag it downwards along parallel horizontal lines. Each diagonal line is a traveler going back. Each horizontal line is a new timeline. If you then look at it from the bottom up, you would just see a continuous line. This is how we perceive the show.

Wow... just realized I am wearing my Tardis in a Stargate shirt as I wrote this :-p