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When you are considering an upgrade in a development tool, how important is backwards-compatibility to you? Would you still purchase Visual Studio 2010 if it required significant changes to your source code? Where is the tipping point for you in terms of trading backwards compatibility for new features?
While you asked this from the point of view of the developer, I think it would be a more interesting question in reference to the software you develop. So I’m going to answer that question instead. 🙂
Hardware and software that’s backwards compatible (and, more importantly, future-compatible) provides a sense of security to your users, especially when buying or upgrading platforms like Windows. If nothing else, Windows is known for its meticulous attention to backwards compatibility. You can run programs written over a decade ago on Windows Vista with only minor problems, provided they were ‘well written’ (i.e. don’t use undocumented APIs).
On the other hand, strict attention to backwards compatibility can tie your hands when you’re attempting to introduce new features or to revolutionize the platform. Apple knew it had a dying OS, and in one of its most daring moves, it purchased NeXT and decided to make NeXTSTEP the new MacOS. One of the key things that sold people on the transition was the backwards-compatible layer Classic. Again when Apple decided to switch to Intel chips, a mechanism for running PowerPC apps on Intel called Rosetta, along with the Universal Binaries, allowed people to freely move between PowerPC and Intel without fear of application loss.
One interesting thing is that with the transition to Intel the Classic environment disappeared, but nobody really cares because they had the preceding 5 years to transition away from Mac OS 9. So it is possible to eventually drop support for legacy systems as long as you have an easy way to migrate to the new system and give your users ample time to do so.