Investing $5000: ETFs or index fund?

I'm making a fairly large amount of money at my internship this summer and I want to start investing some of it. This would be somewhere around a 3 year(minimum)time frame, and adding only 1 or 2 times a year. I've got my options narrowed down to either ETFs or index funds. For an index fund I'm thinking something like VTSMX, and for ETF I'm thinking VTI or similar. My only concern is that I can only afford to purchase one index fund; whereas, I could purchase multiple ETFs. I would really like to get some exposure to foreign markets. I can do this through ETFs since I can purchase more than one, but not with index funds because I don't have enough to cover the minimum initial deposit for more than one fund. Also, I realize I will encounter brokerage fees with ETFs but this is a buy and hold and I won't be trading them. Vanguard charges an annual account fee of $20 per year for every fund account under $10K, so fees could actually be more expensive for the index fund. Any suggestions?

Basically, which do you think is better for me, Index Funds or ETFs? I will be buying and holding regardless of which ever option I choose. I am open to any other suggestions about Fund families or ETFs to consider. Also, does anyone have a suggestion on a discount broker that has no cost dividend reinvestment and limit orders? and how much are their fees?

I would choose index funds.
No transaction costs.
No dividend reinvestment costs.
No temptation to trade.
The $20 a year fee is a motivation to get to 10K.
Vanguard is a great place to invest, however Excelsior funds may be a little better for a person in your shoes.

I would recommend ETF's for emerging markets solely based on the fact that the US economy is slowing for the short-term horizon