Woot, my best subject!
1.5 and 3.4 are firmwares.
1.5, you can put in programs that people make and edit the icons and such.
3.4oe-a is open edition (type A), I use this because it lets you play games (ISO's) that require 3.4 firmware. You can also put programs on this firmware.
don't buy a 3.5 or 3.51+ firmware(s), they aren't downgradeable/hackable.
you can download updates from sony, which is not reccomended =P
EDIT:
Buy a 1gb or 2gb+ memory card, games can be anywhere from 30mb to 1.5 gb. Sandisk is the best. There are also fake memory sticks, and there are guides on that. I'll get some links for you...
Here it is =)
[Click!]