I Update my software when a program alerts me an update is available like for Firefox, or I just manually check when I use the software when I have to use them otherwise they can be out of date for years till I actually use them.
For my Firewall, antispyware, and antivirus, I try to keep them as up to date as possible.
It is also a good idea to update application software like MS Office, and web browser plug-ins Software since they can contain security holes like vulnerabilities to Macro viruses and malicous scripts which aren't patched unless you patch or install the newest version.
Plus, newer versions tend to have better performance, stability, usability, and better or more features.
I use http://software.informer.com/ to scan my PC for out of date software.
I just don't update software I have to buy, or freeware which is now paidware since I'm cheap, and rather keep using the out of date freeware or find something else then pay.
It takes me about 1 day to update most of my software.
