I've been practicing saying them both and here's what I've found about myself.
When we sailed, we referred to ourselves on the radio as "yacht Watermelon", not "sailing yacht Watermelon". We now have a power boat, and I find we refer to ourselves as "motor vessel Watermelon" or "yacht Watermelon". For me, at least, it's what rolls off the tongue, and what I believe is most easily understandable to the receiving party.
Our cards, on the other hand, were "S/Y Watermelon" and now, "M/V Watermelon".
Whenever we are discussing our boats, though, I refer to them as boats. Or sailboats and powerboats.
Hailing a boat I don't know the name of, then it's important to make sure that they know who we're calling - Sailing vessel, motor vessel, or ship (when trying to get that behemoth to notice we are there and that we are turning hard to starboard, or whatever).
Seems to me that it's just whatever gets their attention and is understood.