I'm a fan of UML and use Fowlers UML distilled book as a reference.
My question is : have things moved on in UML, what is the current 'state of the art'. Is there a better reference book for modern UML or is the above still a good reference.
I'd be less interested in 'proposed extensions' and things committees are considering; really I'm looking for what practitioners are actually using, similarly to the content of the Fowler book.
Tool support for version 2.0 is good and practice is to use them, so if you've got the third edition then you've got a good introduction.
The 'state of the art' depends what arena your working in.
For companies which have been using DOORS for ever, UML tools (Sparx Systems Enterprise Architect) include requirements support and integrate with the DOORS database. Such support is used extensively in large projects. The requirements concept came from the SysML extension, but you don't need to know SysML to use them.
Embedded systems also use UML tools with full code generation from action semantics - actions define what the methods do. Such tools generate the full code rather than just method outlines which tools at the EA price-point generate. If you want to look at such tools, Artisan now have a free single user version for download.
If you are really interested in the state of the art, a lot of research is going on in conceptual modelling. UML is just a product, and there is much more to modelling than UML. I am not sure if you are interested in only UML or in OO modelling in general. Let me know; if the latter, I can provide more information.
I'd say that UML has not changed much during the last years. To me, the more relevant change in the software modeling area has been the eclosion of the Domain Specific Modeling Languages that, in many scenarios, have replaced the UML profiles as a way to adapt UML to your specific needs (when the adaptation is straightforward).