"Stable" is one of those words that's used to mean so many things it's almost meaningless.
In the context of an Ubuntu LTS what "stable" means is "doesn't need to be updated for a long time". It doesn't necessarily imply that there are less bugs (although they do test it a little more before release). Towards the end of a five-year cycle keeping an old LTS desktop working well could actually be a lot more work than a newer version.
The advantage of LTS is that it allows you to set up a machine that doesn't need to be messed about with for a long time. IMO that's less useful to most desktop users than it is on a server or an "appliance-like" machine such as an HTPC. It's designed to appeal mostly to enterprise users who want to know that if they throw a large chunk of money at something they can rely on it for a decent chunk of time.
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