After I installed Xubuntu on my nx6310, I ran the update manager, then in synaptic I reloaded packages & ran all updates. Yet I still only find older versions of most applications. For examples: Gimp 2.6, Kdenlive 0.8.2, Audacity 2.0.0 How do I get the repos to update wtih the same package versions that are available in Ubuntu 12.04 & 12.10, both of which have more recent packages? Yes, I am aware that I can manually update all of my packages one by one via ppa's, but I have 69 applications that I would have to first check for latest versions of & then add them through their ppa. This would take FOREVER! So that obviously is not the desired option!

Ubuntu is designed that way; it is a "feature, not a bug." The easiest way to get the packages in the latest release is to use the latest release (currently 12.10). As you point out, you have complete freedom and control of your system to install newer applications from 3rd party sources, such as a PPA or the upstream developer (but Ubuntu will never force upgrades of newer software onto users of a nice stable older release).

But why would I want to upgrade to 12.10 when 12.04 is the current LTS? Even Ubuntu 12.04 has the latest versions of the packages I mentioned.So why doesnt Xubuntu 12.04?

Xubuntu 12.04 and Ubuntu 12.04 are the same operating system with the same package versions.
If you are having discrepancies then please post your software sources (contents of /etc/apt/sources.list and any relevant files in /etc/apt/sources.list.d/) as my hunch is you have added some PPA's or 3rd party repositories.

12.10 has 6 months newer software than 12.04 (and 13.04 will have 6 months newer software than 12.10, and so on). This is what the number signify (year.month). LTS is a great choice if you are looking for a stable platform and don't mind slightly older software.