There are like two schools when it comes to which version to use. One is to not use the latest because "you dont know which bugs this will contain", which is somewhat true... which comes to the second opinion - use the latest version so you dont have any known bugs in your production. I prefer the second method - use the latest version to avoid known bugs (which the latest version have fixed). Hopefully the releaseversions have been tested against some sort of QA at PaloAlto before released in public (compared to beta releases which one might expect be more buggy than final releases). But as a disclaimer - avoid the first releases of a new major version (at least in production unless the major version fixes some bug you spotted in earlier versions). For example avoid 4.1.0 and 4.1.1 (perhaps use them in your lab if you got any) but as soon as 4.1.2 is out I would install it and then install the latest from that branch as soon as its released (and as soon as possible due to maintenance windows etc). Another tricky part is how to handle the URLdb and APP/THREATdb releases - in my opinion since they are about spotting bad code in your environment you should put both to "download-and-install". Yes there is a risk of false-positives but at the same time I would prefer a false-positive over a missed malware (due to slow updates of the db's at my end) in my production environment.
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