12.04 LTS is the most recent version of the system in its long term support (LTS, X.04 numbers) version, which is intended to be more stable than the (pseudo) running releases (X.10 numbers, current one is 11.10?).
The basic difference between the two families is that during their lifecycle, LTS versions only get security fixes, whereas x.10 versions get the upgrades including feature improvements. LTS versions can be viewed as "snaphots" of the features available and stable at the date of their release. Also, LTS versions are released only every 2 years, while .10 versions get a major release every 6 months: stability is the priority in the LTS versions, taking precedence over the ability to stay up-to-date with respect to new features.
However, since the LTS and other major versions are defined by their release date and not by a feature stability evaluation (different policy than Debian, for instance), there is no actual guarantee than 12.04 is "more stable" than 10.04 or than a more recent 12.10. And actually, many people seem to have complained about stability issues or feature regressions since they upgraded to 12.04.
My personal opinion, and it is only an opinion, is that 10.04 (the previous LTS) is very stable and reliable. It lacks the most recent versions of the programs, but I observe less problems in production than with 12.04 installations.