The update of your Ledger Nano S to the firmware 1.4.x is strongly recommended, and will become mandatory on March 20th. Until this date, you are free to use either firmware 1.3.1 or firmware 1.4.x. By mandatory we mean that the Ledger Wallet application will bug you with a popup asking to update your device (but it won't be blocking)

Ahhh...so my brand new still in the box Nano S isn't going to explode if I don't update it before March 20th. Not that I want to wait that long, I just haven't gotten around to setting it up.