I think "most people" run their vendor-supplied Android version and apply whatever updates trickle down from the mfgr. and carrier. Under that model, I've never had an update (as opposed to a version upgrade) break anything, and I don't carry or own a backup phone.
So far as the version upgrade goes, the Eclair upgrade for the original CLIQ broke some things, but that was largely because the Moto team did yeoman work forcing 10 lbs. of manure into a 5 lb. bag.