I have to admit, I'm a "bleeding edge" kinda guy. With only 149 students currently exposed to Moodle, I have a little more flexibility with what I do. I am using 1.3 dev with the calendar, not the blocks (yet) and I LOVE IT!!! The students love it because they can easily track due dates. The parents love it because with a quick glance they can see what's on the horizon. Great stuff!
I would agree with the earlier comment, that the current nightly version seems very stable (relatively speaking) and on my test server the blocks work AWESOME!!!!
In my 1 year using Moodle, I have never had a problem so serious that it couldn't be fixed with a little patience, problem solving and a good backup. And come to find out, most of my problems have been with my hosting company changing PHP settings, etc. and NOT with Moodle.
Best advice... use the released version, but if you like to live on the wild side.....
Marc