Far too frequently in the Android world that you refer to the choice boils down to this: You can either choose to continue running a version of Android that is outdated, or you can buy a new phone and repeat the process in a few months.
I paid $500 for a T-mobile Vibrant, one of Samsung's top-of-the-line Galaxy S models, in July. So we're just barely at the five month mark and it's now two full releases behind mainline Android. The situation is particularly frustrating because the newly released Nexus S, which Samsung also manufactures, is merely a variant of the Galaxy S models. It has exactly the same processor as the Vibrant, and identical hardware specifications aside from the front facing camera and NFC capabilities.
So what do you call it when two nearly identical phones are separated by two major releases of Android? You may not want to call it fragmentation, but in the real world we call it "ridiculous."