Recommended Versions Are No More
Sitecore's policy of having a recommended version has ended. As of now, customers are encouraged to always use the latest version of Sitecore. All existing and future versions of Sitecore are production ready.
When looking to upgrade, customers should now only need to consider the merit of the new features in Sitecore.
As Sitecore is looking to simplify things for its customers, they're making more changes.
2 Version Levels
From Sitecore 7.0 forward only 2 version levels will exist (i.e. 7.1, 7.2, 8.0 etc). Versions of Sitecore below 6 will still have 3 version levels (i.e. 6.6.0)
Feature releases add significant functionality to Sitecore and have a unique 2 level version number. (Sitecore CMS & DMS 7.0, Sitecore CMS & DMS 7.01)
Updates address a series of issue with a specific feature release. Note that updates are cumulative. An Update 3 would contains all updates from Update 1 and Update 2. (Sitecore CMS & DMS 7.0 - Update 3)
Service packs are a series of offical updates rolled up into a single install for a specific feature release. If all updates in a service pack have previously been installed, the service pack is not needed. (Sitecore CMS & DMS 7.0 - Service Pack-1)
Hot fixes are for issues that affect an individual or small number of installations. They should not be applied unless your installation is affected by the issue. They are tied to feature release versions and contain specific reference numbers. (Sitecore CMS & DMS 7.0 - Hotfix 378164-1)
These revised versioning practices are a great step forward. For more info please check out the Sitecore Developers Network. Thanks for reading!