Great little article. I worry about version fragmentation too. Combine that with fragmentation caused by paid apps being only available in certain countries, apps being limited by locale (EU, US, UK, Asia, etc), apps being limited by language, etc, I find it worrying that not much seems to be being done about it to allow everyone to use every app.
I'm not sure what they mean by "Android 1.5 was the version that most early adopters ran on their first phones (including the T-Mobile G1 and HTC Dream)"
The T-Mobile G1 and HTC Dream are the same phone. My T-Mobile G1 came with Android 1.0. I got 1.1 a few weeks later, then 1.5 a few months after that.