What firmware do you have on their at the moment? (Settings>About Phone>Build Number>
It'll probably end in 14 or 16. Upgrading improves the overall performance of the phone, battery life is reported to have improved and just generally feels nippier

. Especially timescape/mediascape

.
The update build number will be dependent on region and carrier. Standard/generic UK ends in 020, where as T-Mobile UK and in India, it ends 23, where as Vodafone ends in 24. All supposedly the same but, just for different networks/regions but, some have found the call volume to be improved on 23 over 20.
Either way, it's recommended to update as it does improve the performance of the phone. It is an SE update though and not an Android update.
I upgraded and it kept my apps and settings but, it's always best to back up your settings/apps first. I was using My BackUp Pro but, it wasnt saving the app settings, I had to do that within the apps but, it did let me back up all the other data - contacts, messages, bookmarks, call log etc. Interestingly though, not my email settings/accounts

. But didnt take two minutes to set them back up

.