Debian "unstable" is the "bleeding edge" version. New packages go in there on a pretty frequent basis, and things change often. Sometimes there is breakage. I would strongly advise against running this unless you're capable of and willing to fix serious breakage every now and then. And dealing with package upgrade conflicts. Sometimes you can't just "update everything", because someone just uploaded X version 2.1, only package Y has a strict versioned dependency on X <= 2.0, so you need to decide what you want.
I used "unstable" on my desktop for a while, but once every 2-3 years I'd end up with a bug that would break the early boot process, and I'd have to muck around with rescue disks and chroots and reconfiguring grub and the like. So I'd advise against this, unless you want to actually get involved in the Debian project.
Now I run "testing" on my desktop. When packages have been in "unstable" for a certain period of time (typically 10 days, although this is changing) without having a Release Critical (RC) bug filed against them, and if the move won't break any other packages, then "unstable" packages migrate to "testing". It's fairly up-to-date, although sometimes a large group of packages that need to transition all at once will take a while to synchronise.[0] And there are explicit "transitions" for some widely-used base libraries when they undergo ABI changes.[1] But you generally don't need to worry about this, as it'll mostly happen behind the scenes.
Still, if you're going to run "testing", I would still recommend installing apt-listbugs, which will tell you if there are any new RC bugs in any packages you're about to install/update (e.g. that were discovered only after the package migrated to testing), and allow you to decline the update.
Then, every couple of years or so, Debian is "frozen" for a few months, and no new updates are allowed that don't fix RC bugs. Once all the RC bugs have been fixed, and these fixes have all migrated to "testing", that version of "testing" becomes the new "stable". ("unstable" and "testing" can get a bit out-of-date during this time, but generally not too badly). "stable" is then "stable" in that it doesn't change at all, except for security updates, until the next "stable" is released a couple of years later. (There is also "backports" which packages newer releases of some software to go on top of stable, but you can't really rely on anything in particular getting a backport version.) This is handy for large deployments where you need to support users who will freak if their menus move around, or servers, or if you want to create your own distro and need an unchanging base platform to work from.
If you're moderately technical, and want fairly up-to-date shiny, I'd recommend Debian "testing". If you're interested in Free Software in and of itself, I'd definitely recommend it.[2]
I currently run Arch on my main computer (and have for the past few years), Ubuntu on a few others, and have dabbled with some other distros for fun. I'm thinking of giving Debian a shot for my main computer, though.
How would you compare unstable and/or testing to Arch (if you have any experience with it)?
Testing's probably relatively similar to Arch, while I'd liken unstable to the AUR. IME though Arch makes living the rolling-release lifestyle substantially easier -- pinholing certain packages from Unstable can be difficult, whereas yaourt and the like make accessing the AUR easy.
There's also something to be said for mindshare. Ubuntu and its PPA system make it easy for people to build packages, and due to Ubuntu's popularity, there are lots of them. AUR does the same. Finding exotic packages for Debian (eg. Steam) can prove difficult.
I used "unstable" on my desktop for a while, but once every 2-3 years I'd end up with a bug that would break the early boot process, and I'd have to muck around with rescue disks and chroots and reconfiguring grub and the like. So I'd advise against this, unless you want to actually get involved in the Debian project.
Now I run "testing" on my desktop. When packages have been in "unstable" for a certain period of time (typically 10 days, although this is changing) without having a Release Critical (RC) bug filed against them, and if the move won't break any other packages, then "unstable" packages migrate to "testing". It's fairly up-to-date, although sometimes a large group of packages that need to transition all at once will take a while to synchronise.[0] And there are explicit "transitions" for some widely-used base libraries when they undergo ABI changes.[1] But you generally don't need to worry about this, as it'll mostly happen behind the scenes.
Still, if you're going to run "testing", I would still recommend installing apt-listbugs, which will tell you if there are any new RC bugs in any packages you're about to install/update (e.g. that were discovered only after the package migrated to testing), and allow you to decline the update.
Then, every couple of years or so, Debian is "frozen" for a few months, and no new updates are allowed that don't fix RC bugs. Once all the RC bugs have been fixed, and these fixes have all migrated to "testing", that version of "testing" becomes the new "stable". ("unstable" and "testing" can get a bit out-of-date during this time, but generally not too badly). "stable" is then "stable" in that it doesn't change at all, except for security updates, until the next "stable" is released a couple of years later. (There is also "backports" which packages newer releases of some software to go on top of stable, but you can't really rely on anything in particular getting a backport version.) This is handy for large deployments where you need to support users who will freak if their menus move around, or servers, or if you want to create your own distro and need an unchanging base platform to work from.
If you're moderately technical, and want fairly up-to-date shiny, I'd recommend Debian "testing". If you're interested in Free Software in and of itself, I'd definitely recommend it.[2]
[0] https://release.debian.org/migration/ [1] https://release.debian.org/transitions/ [2] http://www.debian.org/social_contract