We would need to know where you are. Are you in the US with an HTC MyTouch (the Magic on T-Mobile), in England, in Canada, or elsewhere?
If you are in Canada, and you have a Magic from Rogers, it will be upgraded by Rogers to Android 2.1 soon, sometime in June.
Otherwise you will have to root your Magic to "upgrade" it if your cell phone provider/carrier isn't offering an update.
"Rooting" your phone is kind of like "hacking" it. Some people here will tell you it's very easy to do, but only if you are very good with technology and computers. When you root your phone, there is a risk you will "brick" it, which means that it will stop working completely.