I don't jump to update every time a new version comes out. What I usually do is every other month or so I'll spend an hour updating and testing the latest version of WP with my plugins, and update all of my plugins at the same time.
This time around I discovered one of my favorite plugins doesn't play nicely with the newest version of WP. In fact, the plugin is WP Navi and the newest version of the plugin doesn't work with the newest version of WP. I just figured a way around it earlier tonight.
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