That does look like a good technique. There's dozens of sprite generators out there, but few that are responsive. I'll keep an eye out for more. I've recommended InstantSprite
in the template docs. Here's
another good one.
I did consider using one main sprite image in the template, which is the ideal for cutting down HTTP requests. But not everyone is familiar with them and updating/maintaining the CSS can be tricky.
I would also recommend compressing all images including sprites with the use of PNGGauntlet