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Investment Principal Versus Investment Income...What's Your View?

In a comment David Van Knapp's article "A New Take on the 4% Rule", I posed the following question to AuAg about the distinction between investment principal and investment income:

"AgAu, a couple more serious question on this what is principal versus income issue.... Let's say you buy a stock for $10,000 and, even though you are not counting on it, it appreciates in value to $15,000. Do you now consider the $15,000 as all principal, or just the original $10,000? If you sold $5,000 of it to reduce it back to your original investment, is the $5,000 income or principal liquidation because you liquidated some of your original shares? Related to this, If you reinvest your dividends, is the amount you reinvested still income or has it now become principal once you reinvest it? Is it both? Would be curious what personal rules you have created to make this distinction between income and principal."

I would love to hear the views from income investors as to what their rules are about what is principal and what is income. I would also enjoy hearing how important to them it is, once they establish that something is principal, that they never "invade" that portion of their money and under what conditions, if any, they would.