With Ubuntu you can choose to update your system every six months or every two years if you stick to the "Long Term Support" versions. This option is in the "Update Manager" under Settings > Updates > Release upgrade. But what is the best option, LTS or newest release?
What does LTS really mean for the user?
Ubuntu LTS is nothing more, nothing less than a version of the operating system that you can use for a longer period of time. Since Canonical doesn't want trouble for a longer period of time, the LTS releases are developed with a conservative mindset: instead of adding new features, they work on the existing ones. For this reason, LTS are usually more stable on older hardware (one year old or more) while regular releases tend to work better on computers that just came out from the factory (latest hardware requires latest software).
If you chose to use LTS versions, you should upgrade your system every two years to keep up with the releases. If you update to the latest release, you need to upgrade your system every six month to be up-to-date. Being up-to-date is important particularly because of security updates. It's really not a good idea to use a computer that has security holes.
Companies usually use LTS versions and update to the next LTS only a few months after the official release (this is the standard LTS upgrade behavior). This is a way to give more time for bugs to be fixed. Regular users usually update to the latest versions because they bring improvements over the previous version. All depends on personal choice. Here's a short checklist to help you choose what to do:
Stick to LTS if...
...you just want to use your computer to do your stuff and if you don't care too much about being at the bleeding edge. LTS allows you to stay with the same OS for up to five years without worrying about big changes or system upgrades (just small updates every once in a while).
...you use a particular software that might not be supported on newer versions of the OS, and, at the same time, if you don't need other software that will only be supported on newer OS versions. The principle of this strategy is, if it works, keep it the way it is.
...you install Ubuntu on a large number of computers (in a company for example), and a small change can cause a big problem, then you might as well keep one OS for as long as you can. This way you can avoid updating the machines... and the users! (not everybody is excited about changes on their computers).
...you are installing Ubuntu on someone else's computer and particularly if that person is not a geek. Let's say you install it for your grandma and spend some time explaining to her how it works. It might be hard for her to adapt to Ubuntu on the first place. Having to adapt again every six month might be just too hard.
Upgrade to the latest version if...
...you want the latest, cutting-edge, state-of-the-art technology... for the same price! (it's free right?)
...you want to install the latest-cutting-edge-state-of-the-art third party software available as well... probably for the same price too.
...you want to help Ubuntu development and test the most recent software then you should upgrade to the latest version. If you are really serious about testing or developing then you should also have the development versions as well (the versions that have not been released yet).
In my experience there is no major hassle in upgrading frequently. Ubuntu upgrades are rather smooth and painless. Your apps, files and preferences stay where they are. It's only a matter of abandoning some old habits and benefiting from new features.