There are many reasons why technology is constantly changing... we're (hopefully) consistently learning new and better ways to do things, hardware continues to improve at a rapid pace and new software is made available regularly to reflect the advances in hardware and our understanding. It's the software updates that I wanted to talk about here. Specifically, why it's important to stay current with your software.
Software technology advances year over year. As a result, developers are always learning new ways to improve their products. This drives innovation with software, which means we see new software made available all the time. Some of this is in the form of updates (minor and major), and others are in the form of brand new software. Software updates almost always guarantees that we (the end-user) will have new features to discover and use to make our lives just a little bit better. Those who choose not to be current with their software will unfortunately miss out on those new features. Remember the first version of Windows or Mac OS? We were amazed that an Operating System could look as beautiful as they did. As we look at it now, it looks archaic. Software advances. These advances can ultimately help to improve your overall productivity. Quick example: when Apple announced that they were including a new app called "Automator" with OS X, it changed how many worked. It can greatly help you to automate many of your mundane workflows, possibly saving countless hours. Time is money.
Software isn't perfect. Developers are always making their code stronger and more stable. These stability increases come in the form of software updates. As code is optimized, the developers offer that benefit to you, the customer, usually for free (unless it's a major upgrade). There really is no reason not to take advantage of these updates, especially when it promises stability improvements.
As with stability, no software is perfect as it relates to security. Improvements are made constantly, and these also come in the form of updates. In many organizations, staying current is required for various regulatory compliances. Home and Small Business should be no different when it comes to good security practices.
I find that most who choose to not stay current with their software do so because of the cost involved in staying current. What they don't realize is that it actually costs you more in the long run to not upgrade. Maybe not in money, but certainly in time (and lack of features). Here's an example: when Apple releases OS X Mavericks in a few months, it will take about 30 mins to upgrade my system and will likely cost $20 via the Mac App Store. Let's say I choose not to upgrade to save that $20. Then, when the next version of the OS is released (OS X "Golden Gate"?), I choose to do the same again, to save the $20 upgrade fee. By that point, the new features have become a standard for many, leaving me in the cold. If, at that point, I wanted to upgrade to take advantage of the new features, it would not only cost me the same amount as before, but it would cost more time to get current than if I were to just stay current as updates were made available. The same goes with application updates. The math may not make sense on the surface, but I've worked with enough people in that situation to know that it can be a long and frustrating process to get current.
Kevin's Rule of Thumb
Spend a few minutes once a week to update your software. In many cases, it's free and only takes a few minutes to install. The alternative is to not, and then find yourself in a jam later down the road. Avoid that jam, and stay current. It will benefit you. I'm asked on a pretty regular basis what users can do to keep their system running optimally. Constantly ensuring that your software is current is a big one.