Now and again there's a security hole discovered in the Joomla core. The hole is normally fixed by the Joomla Security Strike Team in a matter of hours, or at least within 24 hours of it being addressed as a threat.
If you do not upgrade to the latest version, you are exposing your sites to these threats, and chances are high that you are going to be hacked by someone exploiting one or more of the holes.
As an added bonus, most of the releases contain other bug fixes or new functionality.
Hosting issues outdated Joomla versions
Some people actually experience that their web host closes down their Joomla site because of security issues. A user recently experienced this after ignoring security updates and running a site on Joomla 1.5.2 for too long. Read more about it here.
The upgrade process
What I normally do is upgrade one of my less critical sites to the latest version and test (always back up your site first!). If everything seems fine I upgrade the rest using the JoomlaUpdater component.
So - always upgrade to the latest version of Joomla!
There, I've said it :) Now go do it!
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