Hi Robert,
The answer to your question depends. There are still quirks (I use that for lack of a better word) to WordPress 2.5 that many users (myself included) cannot stand.
For instance, the widgets management has gone back to the dark ages for users who don't have a bazillion sidebars and . Also, the write page has been heavily modified and those users who appreciated the configuration options of drag and drop will be sorely disappointed.
However, aside from the look and other minor aesthetic differences from its predecessors, it's still WordPress and still has all of the features it once had.
As for the plugins, actually most plugins will still work with the new version unless they add DB tables upon installation or have administration pages.
My recommendation is to install it on a test environment first, download all the plugins and themes you may want to use, and play around with it. If after a week or so, you still enjoy it, then start using it. Right now, I have about 5 blogs running WP 2.5 with other blogs on the older versions.
HTH,
~ Teli