Reasons to stay up-to-date:

1) Security. All software has bugs, and code that is exposed to the outside world, either due to being accessible by the outside world (i.e. ssh), reaching out to the outside world (i.e. browsers) or dealing with data you get from the outside world (i.e. gimp opening downloaded images), all of this code can be exploited by virus/malware writers to do bad things to your system.

2) Bugs. Even bugs that don't cause security issues can be annoying, and newer software tends to fix older bugs.

3) Hardware support. Newer versions of the operating system are sometimes required to work with new devices, especially if you're running an '05 version and you now want to connect to a new TYPE of device (that may not have even been invented in '05).

4) Features. Newer software usually has more features, and can do more of what you want.

Reasons to not stay up-to-date:

1) Bugs. Yeah, newer features mean newer bugs, so this is a double-edged sword.

2) Features. Sometimes (i.e. Gnome 3) new features mean your software won't work the same way it used to, and that can be annoying. Thinking about my mom here, and the fact that once she gets used to doing things a certain way, she usually doesn't want to change (at least not without a compelling reason).

The first four points apply to all programs and operating systems, but specifically as they relate to Ubuntu:

1) All active O/S's provide security patches; I prefer Ubuntu, since as a subscriber to their security list, I have a pretty good handle on what I'm updating when the patches are suggested by the update-manager.

2) All software has bugs; I prefer Ubuntu, since as a programmer I can poke around and submit a bug report or patch and have a better likelihood that there's a human on the other end that cares. Anecdotal, to be sure, but I've done this a few times with open source programs; never felt it worth my time with commercial software.

3) I punt on this one, and only used hardware that I know Ubuntu supports well. It's not a bad tactic to use for Windows as well, as they have driver issues themselves.

4) Given the typically free-as-in-beer nature of Ubuntu, upgrading to get new features has no sticker shock, making it a much nicer process than with other O/S's. Just go and grab various programs and give them a spin.

Bottom line here, I think, is that the reasons you SHOULD stay up-to-date are the same for all programs and operating systems, but Ubuntu makes it better in various ways to ACTUALLY stay up-to-date. (YMMV.)