We use 10.04 (and soon to be some 12.04) at work. The server edition is pretty much a version of Debian. As a sysadmin, I like it a whole lot.
Canonical indulge in mind-boggling WTFery on the desktop - but on the server underpinnings, they actually contribute a lot of paid developer effort directly to Debian to keep things going.
Reporting bugs that were caused by Canonical is pretty much futile, though. With Ubuntu Server you get to keep both pieces just as you do with Debian, it's just they're pretty okay pieces.
Honestly though, problems surrounding "newer packages" is the reason #1 I avoid Ubuntu. I think the problem I had might have been LTS-specific, but I expected it to break less with changes, not more.
I love Debian but Ubuntu really did wonders for Linux adoption. This said, wherever squeeze is modern enough, I will use it instead.
I would have disagreed with you until a few weeks ago. The past few updates have been requiring us to restart our servers. You restart it and a day later there is another update that requires another restart. Putting off updates on production servers is no longer a choice but having them now is not the best thing either.
The issue is versions being pinned on LTS packages to broken versions. This includes svn, MySQL and a notable gcc problem which is a PITA.
Imho using an Ubuntu release is gradually easier than following Debian testing.
And Ubuntu is security hardened. Take a look at this list, Apparmor, stack protection, (more) secure sysctl settings: