VIIB v VIIC
 

So what's the advantage of the C over the B? Is it worth the extra renown?

The C gets a lot more upgrades. It also allows you to mount the VIIC type 4 tower (U-flak). If you want a good, well-rounded sub that you could use till the end of the war, coupled with great dive times and hardware, the VIIC is a good choice.

How about the variants of the VIIC, like the VIIC/41 and VIIC/42? Worth the renown, or better to stick with the stock VIIC?

That I am curious about as well. I'm guessing you get progressively better upgrades. I'd say if you have the rewnown to spare, go for it.

Not sure about SHIII itself, but this shows info on all the type VII boats:

http://en.wikipedia.org/wiki/Type_VII_U-boat

Judging by the data in the wiki article, I would hazard a guess that the '41 and '42 models have increased operational depths and possibly more durable hulls.

Have a look at:

http://www.communitymanuals.com/shii...tle=Submarines

It comes down to personal preference on what you consider more important. I personally prefer a VIIC over the VIIB and stick with it until the VIIC/42 is available (as it can take two extra external torpedoes and has faster speeds).