Hi Bob,
What does "update world" really do?
After you have installed an application, the package
manager (portage) will add the package name to the
world file in /var/lib/portage/world (take a look at it)
After a sync of your software database, portage then
looks in your world file and compares if newer versions
are available of all added applications in the world file.
If yes, they will be updated.
Should this be done weekly, monthly, or never?
My suggestion: Not too often. Update only the applications
you are using. (KDE, OpenOffice, Icecat ...)
Greetings