The Unix kernel acts as a mediator for your programs and your hardware. In addition, it provides a nice, fairly portable interface for programs to talk to your hardware. There is certainly more to the kernel's operation than this, but these basic functions are the most important to know.
Most people upgrade kernels because they want the device drivers and the bug fixes.
If you don't have this version, the documentation in the recommended version of gcc should tell you if you need to upgrade your libc. This is not a difficult procedure, but it is important to follow the instructions. One compiles them separately, and can insert and remove them into the running kernel at almost any time. Due to its flexibility, this is now the preferred way to code certain kernel features. It depends on your particular system configuration.