This has been going round in the forums for quite a while now, but it's time to put an end to the countless questions and uncertainties. The XOOPS Core Team has labelled the XOOPS 2.0.x series (currently at 2.0.13.2) as the version that is recommended for production websites.

XOOPS 2.0.x is the most stable XOOPS release to date. This version has the benefit of years of bugfixes, security patches and performance enhancements. This version is compatible with almost every module and theme created for the XOOPS system. This version is therefore recommended for use on production websites.

Other versions
XOOPS 2.2.x suffers from several behavioral changes that give it a limited compatibility with the current third-party modules base. Also, this version does not have the years of bugfixes, patches and enhancements to make it as stable and fast as the XOOPS 2.0.x series.
Next versions (XOOPS 2.3+) will step back to the original behavior to regain a maximum compatibility level: this means that, even if we'll ensure users can upgrade to future versions, a full compatibility between these versions and modules specially made for 2.2.x cannot be guaranteed and that they may have to be updated to work on XOOPS 2.4+.
Also note that, if you plan to build an highly popular site, you'll get better results by using the latest 2.0.x release, due to resource issues with the XOOPS 2.2.x series.

XOOPS 2.2.x will still be supported: patches will be made, the code will be maintained, bugfixes will still be released, end-user support will still be given on the XOOPS.org website.

Developers are recommended to read the XOOPS 2.3 roadmap on the XOOPS Core development site for information on how to continue development, and module compatibility.