If your Mac is already running the latest and greatest version of Mac OS X, good for you! Skip to the next section. If not, your first step should be to upgrade.
Every release of Mac OS X includes dozens if not hundreds of bug fixes that prevent crashes or other errors and that patch holes that ne'er-do-wells might use to damage or gain access to your system. That fact alone is reason enough to keep up to date. In addition, Apple constantly introduces useful new features, and some newer software runs only on recent versions of the operating system. Often, doing nothing more than updating your system software can eliminate a wide range of problemsand prevent others.
Mac OS X updates fall into two categories: major and minor. Major updates (more properly known as upgrades) increment the digit after the first decimal point in the version number: 10.2, 10.3, and 10.4 were all major updates. With rare exceptions, Apple charges money (typically $129) for major updates. Minor updates increment the digit after the second decimal point: 10.4.2, 10.4.3, and 10.4.4 were all minor updates. Minor updates are always free.
Without exception, you should download and install every minor update. (I do, however, suggest waiting a few days after an update appears to make sure it doesn't contain any serious errors.) The easiest way to do so is to use Software Update (see the next section). Major upgrades are less urgent, because they focus primarily on new features. But because they also fix numerous bugs, you should consider buying and installing them.
Some Mac users, having heard horror stories of half-baked releases that cause as many problems as they fix, feel anxious every time a software update appears. I won't lie to you: major errors occasionally sneak into system updates. But this happens rarely, and in most cases Apple resolves such problems promptly. In addition, a fair number of errors that appear to be update-related are in fact the result of existing problems on the user's machine, minor issues such as incorrect permissions, or even (gasp!) user errors. I can't guarantee that a software update will never break anything, but in my experience the benefits of incremental updates overwhelmingly outweigh the risksespecially if you maintain good backups.