Yes, you can keep playing with the same saves after installing the
patch. Some of the story fixes are not retroactive, but you will still benefit from the extra quick saves, technical fixes, etc. I would definitely recommend installing it.
I only ran into minor problems before I patched the game (a certain magical item someone asks you to steal in Verdistis is breakable before the patch, and it is very handy to keep). I completed my game under the 1.34 patch, started with the original 1.29 version.
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