From what I can remember, 1.6 was also supported by Spellbound (who went on creating Arcania - A Gothic Tale, after Jowood gave stripped the rights off Pyranha Bytes).
Anyway, then community upgrades were only supported and distributed by fans, apparently. 1.74 is the very last version, but somehow isn't displayed on the community patch website, maybe because it has been made by other guys (those who maintained support up to 1.73 said this was the last one they would do).
Actually, from 1.6, I think they decided to add options to change the gameplay itself, too. 1.74 correct other bugs, like shadows on newer drivers, and also adds support for HDR (though I advise not using it - bloom suits Gothic 3 like a charm, HDR makes it look way too shiny in my opinion). Water is also changed into something more realistic. Etc... The PDF manual which you can find in the first link below clarifies all this brillantly.
As for the gameplay changes, I've only played like 8-10h with an old version, and the new one. Well, they are worth activating : they change the gameplay to something more similar to previous installments (harder to play, more realistic skill trees). Originally, you felt that you were a bit too strong on your own once some skills were acquired. It also greatly improves the AI, and rebalances monsters (boars are still strong, but not all-powerful anymore ^^). All this seems to have been really carefully implemented, and still true to PB's intentions (it mainly makes more sense while playing, while adding some eye-candy and correcting quests, as if the game was really finished this time!).
Here are some links:
- original CP (1.73) :
http://www.g3cpt.eu/
- 1.74 version :
http://www.worldofgothic.com/dl/?go=dlfile&fileid=166 The game is still lagging because of the streaming, and might crash, but rarely. I really enjoy playing it on 1.74 now.
Well, hope this clarifies things a bit. Enjoy!