Absolutely. Especially if you're making the rather foolish mistake of using IE as your primary browser, you should ALWAYS be running the latest version for your OS. IE6, which is what came with XP, was such a rotten POS, it was absolutely riddled with security flaws. Literally, for a couple of YEARS there was at least one total system compromise level exploit found every week.
There's also the fact that many sites are dropping support for anything less than IE7, or even IE8 in some cases.
But for the sake of avoiding malware and other nasties, you really should consider replacing IE with any of the following: Firefox, Chrome, Safari, and Opera. All of them are free, all of them probably have near feature parity with IE, if not going well above and beyond, and none of them have the same security concerns IE does. Try all four, keep whichever one you like best.
I am currently running W XP Home edition windows 5.1 with Service Pack 3 installed. Should I upgrade to IE 8 or leave well enough alone (I have not upgraded IE at all since initial installation back in 2005 but have kept current with all updates from MSN)??
Comments or suggestions would be appreciated!!!!

Chowhound
Comic Vine
GameFAQs
GameSpot
Giant Bomb
TechRepublic