With my heart pounding, I just successfully upgraded my news site to WP 2.9. All went well except for one plugin no longer working: custom post templates. I will have to come up with a work-around until/unless the plugin developer comes through with a fix.
Larchmont Gazette is a community news site. We started on WP 2.7.1 back in April, 2009, moving from a totally HTML Dreamweaver process to the WordPress environment. All of our old content, dating back to 2002, is still in HTML form, and we just link back to it.
I use 26 plugins and countless widgets to achieve what you see on the front page. We need to show very different sidebar content depending on where you are in the site, so that's where the widgets and plugins come in handy. The theme, Atahualpa 3.4.4, is amazingly customizable and lets me put extra widget areas almost anywhere.
Content is king, so we deliberately keep the pretty graphics to a minimum. I'd like to add a nicer logo graphic eventually.
We recently moved from prohosting.com to hostgator.com, and our speed improved dramatically.