The latest Chia version is 1.6.0.
There do not seem to be any major issues with it, based on the absence of postings in this forum in that regard.
Assuming you are using Windows:
Download it from chia.net and install it, and you are pretty much done.
The database upgrade is also easy.
From the command prompt, run:
chia db upgrade
If you do not have the chia.exe executable in your path variable, then you will have to “cd” to the directory where it is located, and then run the above.
I suggest that you check your available disk space, before running “chia db upgrade”, because when the upgrade is done, your old database files will still remain (you can delete the old “v1” files once you are confident that your “v2” upgrade is working properly).
I believe that you will need approximately 150GB of free space for the db upgrade to complete.
Note that it will upgrade your blockchain db and your wallet db. And it will take some time to perform the upgrade, due to the size of files involved.
I am not sure what steps should be taken if you do not have enough free space. But there are ways to deal with it. We can cross that bridge if you have that issue.
I do not believe that you “must” do the upgrade.
I believe that it is more of a highly recommended upgrade.
As long as you have disk space, I believe you will be fine with db version 1. But that version takes up lots more disk space than db version 2.
And before doing any of the above, quit out of your GUI, and verify via taskmgr.exe that no chia processes are running. And also make a copy of your “mainnet” directory (and sub-directories), after shutting down Chia, but before doing any upgrades. Hopefully you have some other drive where you can put a copy of your “mainnet” files.