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New-to-us Dual G4 Xserve Questions

We (a small 10-person ad agency) recently acquired a competitor (an 8-person
agency), including their personnel and equipment. We used to operate with
distributed files and an iMac only as a backup server running Retrospect
Workgroup, but they had a dual G4 Xserve running OSXS 10.2.8, with all work
files stored centrally.

The business we acquired had a pattern of over-buying (an Xserve duallie for
8 people?) and under-configuring (with only 512MB of RAM?) but this is now a
pretty nice setup for the combined workgroup. We've adopted their
centralized file storage model. Network performance with the Linksys 24-port
unmanaged gigabit switch I've newly installed is outstanding, with moderate
sized (50MB is middling for us) files transferring almost instantly.

Clients are a couple of dual G5's, a G4 MDD, two older G4's that are soon to
be replaced with new G5's, three PowerBooks, some CRT iMacs in various
colours and flavours, and two PC's used by Bookkeeping.

In addition to storing and serving files, the Xserve (now with 2GB of RAM)
hosts a small FileMaker Server database and runs Retrospect Workgroup
overnight. The group's 'net access is handled by a hardware router from our
fractional T1 line.

Other than bulking up the Xserve's RAM and adding the new users I've avoided
messing with it too much. (I did also move FMS from the separate Mac which
used to host it.) Everything appears to work just fine.

If you've been patient enough to read this far, here are my simple
questions:

1) Is there any compelling reason to upgrade from OSXS 10.2.8 to 10.3.x, or
is this a case of "it ain't broke, so..."? Needless to say I have squat
prior experience with OSXS, much less Unix.

2) Regarding Apple's OSXS upgrade policy, it appears that one either buys it
anew each time at a grand a pop (ouch!), or gets the three year upgrade
subscription for $899 (better). Am I missing any other option for when we do
upgrade, whether sooner or later?

TIA,

Neil
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