Most of the production machines are currently 2.2 (aka potato). We will probably switch to woody (3.0, which as you may know is actually just one version higher than 2.2) for new machines as soon as it's frozen.
We do currently use woody for some backend stuff (mail servers, some development and database machines), but most of the machines are still running potato. We generally stay with the current -stable branch of debian. This does result in some outdated packages (and sometimes we'll have to build our own, updated packages if the version is too old), but we prefer to stay with the version that's least likely to cause problems for our customers.
We will dist-upgrade existing machines eventually, as well, although I don't know specifically when this will happen.
(Heh... he said "woody").