Hi John!
1) If I want to keep the stablity should I wait and upgrade the distribution which will include the lastest version of KDE?
If you update your KDE, it will be as stable as with SuSE 8.2 But I'm rather sure, you have to tweak it here and there a bit and you could have some very small drawbacks (nothing serious like yast modules will not work from KDE control center and so yast must be startet seperately if wanted). If you are a somewhat experienced linux user, then you will survive and get a good KDE 3.1.1. If not, I suggest you get SuSE 8.2. You will have much more than only a new KDE.
2) If its thought that it is safe to upgrade to 3.1 then what is the recommended method/route?
There are some methods around, choose your poison. I prefer to install the RPM packages by hand and install with "rpm -Uvh file.rpm". You have to look for all KDE packages, and at best you uninstall all of them, get the new ones and install kdebase3 and then choose from the others what you like to have. But I have SuSE 7.3 and I heard of a better way for SuSE 8.1 using yast (but I'm not sure, if this is working. search the archive for that).
3) Given that it is OK to upgrade should I upgrade to KDE3.1 and then upgrade to 3.11 or can one jump from 3.0.4 to 3.11?
You never have to make more than one update on linux. These are no differetial updates, it contains the full version with every single file. Get the last ones and you will be happy. Greets, Daniel