The latest stable kernel for 11.1 x86-64 is
2.6.27.19-3.2.1 ? Or there’s newer?
Should I update kernel when it show up in update applet?
I’m planning to install ATI driver for my Radeon HD3200 graphic card,but if I update newer kernel later,will it screw up my system?
Any suggestion? 
Better at the moment don’t update. I tried it and It’ll kick out the ATI driver. So that you can’t use it. I hope it runs on the new kernel soon. Then you can update.
And don’t ask about the security risk. There is always one when using older software. But the grafik is more important. (At least for me)
If it is a security update then yes you should up date the video drivers supplied by ati and nvidea might not be built for the latest kernel but should catch up.
alternately download the latest drivers from amd or nvidea
ATI Catalyst™ Proprietary Display Driver
for the latest ati driver read the documentation