The OS is already Android 2.1 (eclair) and an update to 2.2 (froyo) is expected in 3rd Quarter of this year, so imminently. It'll roll out first to unbranded phones, ie one's that weren't bought from a carrier, and a little later to the branded ones.
I'm generally very pleased with mine, but not without niggles. Mine has a bug where the wifi disconnects as the screen turns off, and it also won't let me select my location as UK/English, it seems determined to place me somewhere in central Europe. Not usually a problem but some apps won't work as they are dependent on your location (Amazon MP3 app for one).
Enjoy!