Read the release notes for each driver update. If you feel you're affected by an issue that they feel they've solved in the update, then install the new driver. I haven't updated my nvidia drivers in months, but I'm not gaming on a daily basis either...
Yeah dude, theres really no reason not too. If you have a problem then roll them back. Updates really do help though, I noticed some white lines(waterlines) on UT3 and COD5, updated them a month ago and it went away.