You do have to re-compile every time you want an update applied to your server.
I can't stress this enough, backup before you do (this applies to every digital piece of information you have control over--not just EQEmu). If you have a working server make a backup copy somewhere of the entire server folder. That way if anything goes wrong you can always roll back. (I know backing up is the most basic idea, but I know plenty of veterans that sometimes make this mistake, me included. I can count the number of times that backups have saved me a ton of grief. Just sayin.)
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