Mozilla touts better performance in version 3.5 along with features like private browsing and tear-off tabs. However, it also warns users of potential add-on incompatibilities – which could be a deal breaker for many. We recently posted a workaround to get incompatible add-ons running with the latest version of Firefox, but there are no guarantees that they’ll function properly and in fact results can vary considerably.
Firefox 3.0.x is still going to be supported until the end of the year. At that time, Mozilla will halt production of security patches for the older version, forcing any remaining holdouts to finally upgrade.