Yes, you should update to 5.3.8. It is the latest stable release and, where possible, it is recommended that everyone uses the latest stable release.
As for PHP 5.4, the plan is to start the beta cycle this week with a view to moving to Release Candidates in mid-October. After a few RCs, around very two weeks, will come 5.4.0 proper. So, tentatively, somewhere mid-November or December hopefully.