We do a 5-man system in my 14-teamer, but it really depends on the size of your league. Just remember that the deeper the system, the more knowledgable your owners should be. I'd say anything that puts more than 100 guys in your farm (7*14, 8*12,10*10) is getting ridiculously deep. The only time you want more than than that is in dynasty leagues where the minors literally feed the majors.
As for retention, it again depends on your league. If you have a straight keeper league with limits on the number of keepers, than the time in minors should be inversely related to the size of your keeper list. If you only keep 5 guys, then let them keep the minors players a little longer. If you keep 10, than minors players should be bumped pretty quickly.
My league uses contracts that go into effect when the owner promotes the player. To offset that "cost," we allow them to retain the player in their farm until that player begins a season as a non-rookie. At that point, the owner has until the end of that same season to promote that player.