To the second part of your question, there is no set rule to use the latest drivers. However, as a general rule, whenever I install new hardware, I use the latest driver from the website as the one on the disk may be very old. If the original driver is pre-XPSP2, or if using Vista, you should have current drivers. At the very least, you can check the version history on the website and see if any changes have been released and if the changes affect you.
However, once you have your hardware up and running, I advise against updating the drivers just because a new one is out there. IMO, you should only upgrade existing drivers when one or more of the following conditions are met:
1. The new driver addresses an issue you are currently experiencing
2. The new driver addresses a security issue
3. The old driver is corrupt and reinstalling it does not fix the problem