HT4623 Do i need to update this new update to my IPhone 3GS?

Do i need this new update to my IPHONE 3GS? as not enough space - iv deleted all the stuff i no longer need but still short.

Well, you don't absolutely have to have it ... but ...
First of all, here's what you would be missing (I assume you're talking about upgrading from iOS 5.1.1 to iOS 6):
http://support.apple.com/kb/HT5457
Secondly, as additional upgrades become available, you'll fall farther and farther behind.
Thirdly, as apps are updated, you may lose out on the ability to run them, and you will lose out on added features.
So, it's not mandatory that you upgrade, but I strongly suggest striving to do so.

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