What's the difference between Android 2.2 Froyo and Android v1.6 Donut? I am really new to Android and I barely know about it.

I now want to buy an Archos device that should be an alternative to iPod and its size should be like the iPod.

I saw there are different Archos devices.
I am doubting between the Internet tablet (Android 2.2 Froyo) 43 and the 48/5 (Android v1.6 Donut).

What is a better OS? What is more advanced?

My desires:

Mandatory:


Audio/Video playback (flash)
Wifi (Gmail, GCal sync)
eBook reader
Pocket size (iPod size or so)


Desired but not mandatory:


Voice mic (for potential web conversation, and recording)
Video/photo camera
FM receiver


BTW, I just saw Android 3.1 is out, is it possible to update these devices with the new OS?
There are HUGE differences between 1.6 and 2.2. 1.6 is also a pretty old version of android. Flash is only available for 2.2 and later, so if you have to have flash then you need to go with 2.2. But the archos 43 does not have an FM receiver, the 48 has a receiver, and transmitter. 

The UI had big improvements in 2.2 compared to 1.6. The ability to install apps on an external sdcard is also available on 2.2, but I don't think you will really need that as the 48 says it has 500GB (that seems like a lot for a device like that...). I have also read that it is possible to install froyo on the 48. 

3.x is currently only available on select devices as they have to "partner" with google in order to have access to Honeycomb (3.x). So I wouldn't expect to see an update on these devcies anytime soon for 3.x.