The release of Joomla 1.7 came this past July, just six months after Joomla 1.6 in January. That's how Joomla does things now: a new major release every six months.
Does this mean you have to upgrade every six months? It depends.
Joomla 1.5 is a long-term release. The Joomla team will keep providing security fixes for Joomla 1.5 until a few months after Joomla 2.5 , the next long-term release (why is it 2.5?), comes out next January.
If you're running Joomla 1.5, you can wait to upgrade.
But Joomla 1.6 is a short-term release, so they're not providing security fixes anymore. They're focused on Joomla 1.7.
As this FAQ explains, 1.6 sites basically have to upgrade right now. The only alternative is to wait until the inevitable security hole in 1.6, at which point you'll have to do the exact same upgrade, but this time, with the added thrill of racing against an entire Internet full of bots seeking 1.6 sites to compromise.
So, one more time: 1.5 sites can wait, 1.6 sites have to upgrade.
I'm really not sure about this numbering scheme.