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I have a 10.04 image from vmplanet which I am very accustomed to, for my development work which revolves mainly around java, git and rails (using rvm). I didn't like the Unity interface so I did not seriously consider an upgrade to the 11.x versions, but now that a fair amount of time has passed and another LTS might be round the corner, I am trying to find out if there are other benefits in upgrading, or pitfalls I should avoid.

Edit: I am also interested in factors relating to interoperability with Windows (either as an image or native install), i.e. file/folder sharing, networking

prusswan
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Well, some basic things you may want to be aware of are that Oracle (Sun) Java is no longer in the repositories. You can still install it, via the official Java page, but it isn't nearly as easy to install and update as it used to be. Git, Rails, and RVM work fine in 11.10, and should in 12.04 as well.

You may run into various issues with program compatibility if you use a lot of lesser known packages, but most tend to work perfectly well in the newer versions of Ubuntu. The biggest pitfall is if you are using a 64-bit installation, programs requiring the old ia32-libs method of 32bit compatibility will not work, since ia32-libs is no longer supported.

The good news is that all the main programs will work just fine with no new issues, but there may be some minor issues with some fringe applications working, at least in the beginning.

Also, I recommend staying away from Unity if possible. Its not that great, and while it should stabilize considerably in 12.04, it still isn't terribly flexible. I recommend using Gnome-shell and getting accustomed with the way it works. I keep Unity installed in case I ever want to use it, but I have Gnome set as my default.

Overall, you can't go wrong upgrading to the new LTS release when it hits stable, just be aware of what has changed and that all the programs you use have support for it.

I'm not entirely sure what you mean by Windows interoperability, but nothing significant has changed in that regard with 12.04 that I am aware of.