Is it recommended to upgrade my kernel whenever a newer verion come out to get the better security and such? Or is it best to just leave it the way it is if everything is working right. Is there a chance that after I upgrade my kernel some of my soft ware wont work correctly?

If there is any sort of security issue I would say yes, but basically the kernel shouldn't need to be upgraded if the existing one already supports all of your hardware.

You can also upgrade for other sorts of support but you decide on if your going to use it or not really.

All in all, if your system is working fine with the current kernel you have, you don't need to upgrade.

Check www.kernel.org for changelogs, info about each kernel release.

if you compile your own kernel from source then until you know what you're doing pretty well the chances are that it will not work very well. but this won't normally stop applications running, it will normally just stop the thing booting or mounting partitions... but you'll always have a working kernel still installed so it'd be nothing to worry about.

obiovusly as kernels develop they have fixes and additional features but unless you are aware of issues that are stopping things working on your system there is no great advantage in upgrading. having said that though it is good experience. for the brave.

ya I just realised that it kept all the earlier working versions of my kernel on the drive to boot from with my boot loader. I figured all the older kernel versions on the boot loader were just non working and just needed to be removed. Guess not.
I just got the latest version of the kernel and tried to boot it up and my xserver isn't working. I gives me all the same garbage it did when I installed my nvidia drivers incorrectly. I do have the drivers working with the kernel I'm running right now. Is this just the version of X that I'm running that is causing it not to work with the new kernel?

Actually I've had the same problem recently. Installed a new kernel and logged in and typed startx and it popped up an error about nvidia drivers. Tried to re-compile my nvidia drivers and that failed too, so I booted back to my old kernel. Have to wait till I get home to post exact errors.