Your choice will depend on what you need from your MySQL server. At a bare minimum, you should be using the latest release of MySQL 4.1. From there we need to look at your needs. Do you need Stored Procedures? Views? Triggers?
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The full list of what MySQL 5.0 adds is available here. The tradeoff is that ,while MySQL 5.0 is declared production-ready, it is less proven than MySQL 4.1.
For a shop that is in the planning stage or development stage of a project, I would recommend being more agressive with the version of MySQL used because as you develop and mature your product, the version of MySQL you have chosen will also mature. As such, you may even want to look at the feature list of MySQL 5.1 and see if there are features you can take advantage of.
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