We present the latest development of the disk gravitational instability and fragmentation model, originally introduced by us to explain episodic accretion bursts in the early stages of star formation. Using our numerical hydrodynamics model with improved disk thermal balance and star-disk interaction, we computed the evolution of protostellar disks formed from the gravitational collapse of prestellar cores. In agreement with our previous studies, we find that cores of higher initial mass and angular momentum produce disks that are more favorable to gravitational instability and fragmentation, while a higher background irradiation and magnetic fields moderate the disk tendency to fragment. The protostellar accretion in our models is time-variable, thanks to the nonlinear interaction between different spiral modes in the gravitationally unstable disk, and can undergo episodic bursts when fragments migrate onto the star owing to the gravitational interaction with other fragments or spiral arms. Most bursts occur in the partly embedded Class I phase, with a smaller fraction taking place in the deeply embedded Class 0 phase and a few possible bursts in the optically visible Class II phase. The average burst duration and mean luminosity are found to be in good agreement with those inferred from observations of FU-Orionis-type eruptions. The model predicts the existence of two types of bursts: the isolated ones, showing well-defined luminosity peaks separated with prolonged periods (~ 10^4 yr) of quiescent accretion, and clustered ones, demonstrating several bursts occurring one after another during just a few hundred years. Finally, we estimate that 40%--70% of the star-forming cores can display bursts after forming a star-disk system.