Shall we go ahead and download the latest xcode (xcode 3) @ http://developer.apple.com/technologies/tools ?
shall we keep the xCode 3.2 which does not have the 1500+ API that's in the xCode 3.0?
I think you mean the iPhone OS SDK 4.0 ..
I wouldn't touch it personally, for now. Aside from the potential issue regarding the developer's agreement (see the dev blog) I've read reports that people have had trouble building Ti apps once they have it.
Having said that, even if you have the latest iPhone SDK installed, you should still be able to build against previous versions.