Should I upgrade? btw Merry xmas eve

I am on WP 2.8.5, and I know that it is true that eventually all software must be upgraded to keep pace with technology.

Right now the theme and all six of the plugins play together just fine. Can I please get some feedback on the consensus as to how often WP versions should be updated?

Yes, new functionality is always a good thing, and I use it to provide my visitors, helping to covert them into sales.

My concern, and I have seen this before on this blog, is that in upgrading, things stop working. I would imagine that when new versions of WP, they have bugs that get uncovered and corrected.

Is there a general rule of thumb to upgrading, and if there are issues that are unable to be corrected after upgrading, is that a way to reinstall the older version until a more permanent solution can be identified.

Thanks, and Merry Christmas.