I've found that web development as a whole works best by iterative development, using many concepts from Getting Real and other agile theories. This is definitely true of Drupal.
Something I see quite a good amount of with Drupal modules is a tendency to hold onto fixes committed to CVS for some time. I believe this is counter productive. While yes, it is good to hold onto new, big features until they have simmered for a while and proven to be stable, smaller updates and especially bug fixes, should be rolled out regularly.