Should I care about the version of android?
As a user, definitely. It's supposed to be a LOT faster, and has some neat features. As a developer, it depends on your audience - while probably all devices that run 2.0/2.1 will be able to be upgraded to 2.2, right now, more than 50% of all Android users are using 1.5 and 1.6, and their devices won't run 2.x. Would those be your users, or your potential audience? If so, you need to think hard about not supporting them.
Would I be able to update to new version of android on any phone I get.
Depends on the phone. If you get one that can run 2.0 or 2.1 (Droid, Nexus One, and newer models), then it's almost certain you'll be able to upgrade to 2.2. But some of the earlier models (like the T-Mobile G1) won't run 2.x due to memory constraints. Check the manufacturer's web site for details.