Your Pleo can be upgraded to either 1.1 or 2.0 the Original Ugobe Pleo versions ONLY! You cannot use RB software updates in a Ugobe. So anything from here is safe: http://bobthepleo.com/forums/index.php?action=downloads;cat=1
As to which one is the best, 2.0 is great but you have a teething period of about 8 battery cycles where Pleo acts like a teenage terror
2.0 adds a lot of new tricks.
1.1 is more like the original OS, only a couple of tricks and Pleo really doesn't change in terms of personality.
Neither really changes the Pleo.
For batteries you need to look in the stores here or on ebay for the White Ucube (Egg) batteries, they are Li-poly like the Reborn batteries and are excellent. They will give you two hours of runtime per charge as opposed to the 1 hour from the green batteries. You must buy at least one accompanying egg shaped charger to use them. You cannot use the Reborn batteries in an original Pleo.
There is no way of replacing a Pleo's skin
Small repairs with superglue are possible, but make sure you have a rubber safe glue!
Please see here for key differences between Pleo and Pleo Reborn http://bobthepleo.com/forums/index.php?topic=2724.0