[support] Using Git for Site Building

[DTH]

So I want to create a new D7 site and I've read http://drupal.org/node/803746

I think I get it. So basically I'm creating a branch for pure Drupal
core which I can pull to whenever I want to update Drupal. Say I only
want to work from official releases (current 7.8). I checkout the 7.8
tag. Branch that to "mysite" etc. Then I add all my contrib modules
and custom modules to the "mysite" branch. Then when 7.9 is released,
I pull again from Drupal.org, checkout the 7.9 tag(?) and then merge
that with "mysite"?

However, (in part, as 7.8 is a way behind head), isn't my Git timeline
cluttered with things that are fairly irrelevant to me? I can see that
using Git makes it much easier to get the latest version (rather than
download zip, unzip, delete, copy etc), but it makes it harder for me
to see my (irregular) changes to my custom modules and htaccess etc
when they're mixed in with dozens of changes to core? Especially as
lots of those changes are already ahead of where I start building my
site?

Also, if I'm going this route: should I have contrib be handled by Git
as well? So I can pull the latest version of Views or Domain Access?
If I do that, does the whole thing end up a mess with 40 remote
repositories etc?

Are there any other suggestions/alternatives/tips for someone who
wants to build a site and use Git mainly to keep track of their own
changes? Can I make Drupal a submodule? (I'm still not super sure how
there work mind)