The latest version of WordPress is just installed to all demo themes and there have been no problem during the update process. So you may proceed to upgrade your WordPress version.
The new version has a lot of new features including a brand new admin layout which is aimed to speed up any task you do on your blog. Also it is probably going to be your latest theme update since built in functions are going to handle further theme updates from now on.
Probably coolest changes that comes with WordPress 2.7 is the new comment threading and pagination features. Our themes are currently being updated to include new comment features
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