Google has been iterating quickly, but the problem is that carriers aren’t interested in any updates at all for phones they’ve already sold. The carriers have learned nothing from the iPhone, or, maybe they just don’t care about Android as a platform.
They don’t care because they didn’t have to pay for it. They’ve got low commitment to the platform, low loyalty to the OS vendor and now reckon they can switch between Symbian, Windows Mobile/Phone and Android at will (not to forget whatever hell Nokia is about to consign maemo to).
So, in the end, OS version fragmentation may be less of a problem for Android users — two years from now. Current Android users, except for Nexus One owners, are shit out of luck. Hope you like Android 1.6 if that’s what your phone shipped with.
To be honest, this isn’t a tremendously big problem. Android has bigger fish to fry than satisfying a few early adopters, a large percentage of which either got the phone for free or went Android because it didn’t have an Apple on it.