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I've got one new site that uses show/hide divs to exhibit frames-like behavior. The one pitfall I can see right off the bat is that the actual HTML doc gets pretty big, and that doesn't always work well with search engines -- in recent times they seem to reward bite sized pieces.
But so far the users love the thing. One download and then the second level links load instantly.
The other problem is that people will come in from a search and hit the page in its default setting and not see what they are looking for and then they leave.
I had an enormous increase in traffic after dropping the show/hide setup, although I do still use it on my FAQ pages.
You may want to look into using server-side includes or SSI. You can 'include' files that contain common elements like the header, footer, navigation, etc. That way you only have to make changes in one file, like with frames. You can do this with PHP, Perl, ASP et al. It's actually quite simple.
Also, you can use a combination of DW templates and include files.
but the problem with it was that I could not track what people were doing on the site
Since you're already into javascript with a show/hide divs approach, you can add a small js onClick functionality to track your user's choices. Takes some work, but it's do-able. Of course not all browsers give a dependable referer, but you can handle a great majority.
The other problem is that people will come in from a search and hit the page in its default setting and not see what they are looking for and then they leave.
Again, this can be resolved with javascript, by pulling the referer field and parsing out the keywords - then doing the correct show and hide. There is a bit of trouble with the fact that different search engines use different formats -- but again, it is do-able. A good scripter could knock it out in maybe half a day.
I had an enormous increase in traffic after dropping the show/hide setup
Do you mean an increase in page-views? Or if you mean an increase in raw traffic (unique IP's or user sessions), how fast did that increase build? I'd assume it was after your revised site was indexed by the SEs -- am I right?