Latest Bitcoin-Qt version: 0.7.1 ...I have v0.6.2-beta ...Is it recommended to upgrade it every few months?If so,whats the process?
Each of the Bitcoin.org clients are backward compatible. You simply can run setup on top of an existing installation. With linux, you can simply overwrite the existing executable with the latest.
The wallet.dat is not touched during the installation process. It is still advisable that you make a backup of the wallet.dat from right before updating though.