Java is a programming language that is used to run , programs , games , business applications and other internet applications.
Java updates improve performance and security of their associated applications so yes you should keep them updated.
For more details on Java please see this link on the Java website
So yes you should keep Java up to date through the appropriate links.
Windows will do this through the Java updater and Apple computers will do through their official software update.
It should be kept up to date as if not it can be a security vulnerablity as in the Mac Flashback Trojan.