FREQ CONGESTION; LATE POS RPTS AND HEAD ON ARRS TO DEPS CAUSES NMAC.

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WE WERE ON THE ILS RWY 25R TO LVK; AND WERE INSTRUCTED TO CONTACT LIVERMORE TWR BY SCK TRACON. WE CONTACTED TWR AND WERE TOLD TO RPT THE LOM AND LEAVING 1500 FT. LIVERMORE'S WIND WAS OUT OF THE E AND THEREFORE THE APCH WAS OPPOSITE DIRECTION TO THE DEPARTING TFC. WE PASSED THE LOM AND WERE UNABLE TO RPT DUE TO FREQ CONGESTION UNTIL WE WERE ABOUT 3/4 OF A MI PAST THE MARKER. WE WERE UNABLE TO RPT LEAVING 1500 FT UNTIL WE WERE AT ABOUT 1100 FT; AGAIN DUE TO FREQ CONGESTION. THE VISIBILITY WAS RPTED AS 4 WITH HAZE; HOWEVER ; THE SUN WAS STRAIGHT IN OUR FACE; AND OUR FORWARD VISIBILITY WAS NOT MORE THAN 1 1/2 - 2 MI. THE CTLR CLRED NUMEROUS ACFT FOR TKOF OPPOSITE DIRECTION TO US; AND THE ONE WE ALMOST HIT WAS CLRED FOR TKOF OFF FROM RWY 07R; PRIOR TO US RPTING LEAVING 1500 FT; BUT AFTER WE HAD LEFT 1500 FT. WE COULD NOT COMMENCE THE CIRCLE MANEUVER UNTIL GETTING THE ARPT IN SIGHT; WHICH DID NOT HAPPEN UNTIL 1 1/2 MI FINAL DUE TO THE POS OF THE SUN. WHEN THE CTLR NOTICED THE CONFLICT; HE INSTRUCTED US TO TURN R IMMEDIATELY (CONTRARY TO PUBLISHED CIRCLING RESTRS) AND MAINTAIN VFR (EVEN THOUGH WE WERE ON AN IFR FLT PLAN). WE WERE NEVER IN DANGER OF COLLIDING WITH THE OTHER ACFT AS I HAD BEEN KEEPING TRACK OF THE OTHER AIRPLANE SINCE HE HAD BEEN CLRED TO TKOF. THIS WASN'T WHAT I WOULD CLASSIFY AS AN INCIDENT. HOWEVER; THERE WERE SEVERAL ROUTINE PRACTICES IN PROGRESS THAT WERE POTENTIALLY HAZARDOUS. FIRST; THE CTLR WAS USING POS UPDATING TECHNIQUES THAT WERE NOT EXCEPTIONALLY PRECISE. THE MARKER AND 1500 FT RPTS WORK FINE WHEN THERE'S ONE AIRPLANE ON FREQ; BUT WHEN THERE'S SIGNIFICANT FREQ USAGE; THOSE RPTS CAN BE UNRELIABLE. SECOND; THE CONDUCT OF LOW-VISIBILITY; OPPOSITE DIRECTION TFC OPS IN A NON- RADAR TWR IS A DELICATE THING. THEY SHOULD ALMOST EXPECT THESE NEAR MISSES TO OCCUR. I AM NOT ABDICATING MY SEE- AND-AVOID RESPONSIBILITY; NOR AM I SUGGESTING THAT ANYTHING THE CTLR DID WAS INCONSISTENT WITH HIS 7110.65 MANUAL. WHAT I AM SUGGESTING IS THAT CTLRS BE AWARE OF THE LIMITATIONS OF THE SYS OF ACFT TRACKING USAGE IN AN EFFORT TO REDUCE OUR RISKS OF CORONARY DIFFICULTIES.