Hi Arshad!
There is no functional argument for making this decision. Version 2 clients
will work fine on a version 3 server and version 3 clients work fine on a
version 2 server.
I would first update my server and wait for a few weeks before updating all
the clients, just to see if everything stays stable.
You can then update the clients one at the time. There is no problem when
you mix client versions. You only have to consider that when you update the
client the first backup will run a little bit longer than usual, because the
file information will be updated on the server. It doesn't resend the files
as far as I know.
I would advice you to use the most recent server and client code. This
contains the latest fixes and also offers you the (very nice) Web Client.
Kindest regards,
Eric van Loon