Its been around 2 years since Android's first release and already there are 6 to 7 Android releases, unlike Windows mobile.
You will notice that Microsoft discontinued Windows Mobile.
And I found between 2.1 and 2.2 there are lots of changes.
Not really. From a developer's standpoint, little really changed that affects your code. I have well over 100 sample apps and Android components, and I do not recall any of them needing to be modified for Android 2.2. I did have to create some new samples for some new 2.2-related stuff.
The way to call my local services
I am not aware of any significant changes to the local service API introduced in Android 2.2. Care to elaborate?
and other methods have been deprecated
That will happen. Note that "deprecated" in Android generally means "we'll support it as long as possible, but we really recommend you use other stuff". The primary exceptions are where things were deprecated for security reasons.
So how stable is Android 2.2.
I haven't had particular problems with it on my Nexus One, which I use daily, or on any of my other test devices (used much more sporadically).
Are we gonna have more frequent release?
Google has indicated a goal of dropping back to two releases per year, which is what is 2010 is looking like. It is possible that allowing the Android Market on Google TV might require three releases in 2011, but only time will tell.
Developing in 2.2 is it going to bite me down the road?
No more than developing for any other operating system. All OS manufacturers have the same basic goal: allow apps written for earlier versions to run on new versions with as few changes as possible, ideally no changes at all. All things considered, Android does a pretty decent job of this, though there is always room for improvement.
2.2 sounds like a sub version, its not base lined yet.
That is your opinion. Considering that there are tens of millions of Android 2.2 devices in consumers' hands already, I think that Google, device manufacturers, mobile carriers, consumers, and developers all realize that Android 2.2 is "base lined".