Jakob Nielsen is right to point out that software errors are expensive -- especially when they're embedded in ubiquitous programs like Windows and Word. But he's completely wrong when he suggests that part of the answer is to "Avoid recently released software....A good rule is to stay two years behind on upgrades."
If you stay behind on upgrades, you won't suffer new problems, but you'll be guaranteed to suffer from the old problems. It's silly to suffer from old problems when someone has already fixed them! Yes, they might have created new problem, but usually these new problems arise only when doing things that were completely impossible in the old version.
Think about it: wouldn't you like your competition to be using software that's two years out of date?