The latest version of Desktop Manager will be fine. Has nothing to do with the device model.
An OS upgrade probably is not going to fix the problems you describe. It wont hurt to do it just to satisfy yourself, however.
You do not need to wipe it first for an upgrade. You do need to delete the vendor.xml file if the OS is released by another carrier .... see the directions in the "latest OS" post for your model.
On the service book question, see Unlocked Storm on AT&T or T-Mobile