I will let others comment on their experiences going from 6.2(2) to 6.3(x). My experiences have all been fine.
Cisco always recommends the latest release within a specific train. In general, new features are not added to maintenance releases of the PIX code. So, the difference between 6.3(3) and 6.3(4) is bug fixes only.
And yes, 6.3 code will run on a PIX 520. However, this will be the last release of PIX code that will be supported on the 520 platform. The 7.0 code, which is set to be released in the next month or so, will not support the 520 platform.
I hope this helps.
Scott