YMMV.
There are many advantages but just as many disadvantages.
I just told you that we have no issues with latest updates.
Here you can see that Apple's patch fixed Nav Services that actually helps with saving files to server, subsequently fixing Indesign crashes too.
Tim Cole's InDesign BackChannel: InDesign & Leopard: 10.5.4 Nav Services Fix!
Software world is very complex and you have to be on top of the updates (not blindly, research).
Multiple companies makes software and they use each other libraries so sometimes your particular software might not work but it is your system version that is not working well.
These are called software bugs.
Usually with new versions and patches they fix bugs and sometimes they introduce other problems.
Sometimes security updates warrants updating, as long as you know the rest of your software will work fine.
Sometimes with updates they introduce new features that you might be waiting for.
For this particular purpose I am always on the edge with latest updates and if after couple of days I don't run into any problems with updates and/or I don't read anything online, I recommend my guys to update too (green light).
It works for me and as I said YMMV (Your mileage May Vary).
We don't use WIn2003 server as you are since our main server is Linux with Samba and Netatalk.
For what we use Win2003 server, it works just fine.
What are the advantages to being up to date with Apple's latest software patch? It doesn't introduce anything to help in our environment. I've got a business to run and jobs to produce why gamble with a patch level not proven to work well with most versions of software?
Our server is win 2003 mounting smb to our mac's as supplied from Heidelberg. We save fat ps files no OPI. With Quark 7 we write the file to our desktop and copy it to the job folder. Otherwise Quark 50% of the time doesn't write the file if it is written directly to the server.
Thanks