I am going to attempt an answer from the vantage of my less-than-perfect knowledge--someone correct me if I'm wrong.
You can install newer versions of programs, but it may cause dependency issues later on. However, if you install the new Mint every time it is released then you are formatting your hard drive every 6 months and you shouldn't have any problems.
As to your final question, any Ubuntu 7.10 app should work on Mint--but there may be exceptions... But I've never found one...
Facts do not cease to exist because they are ignored.