2.5.3 is the current version of Joomla at the time of this writing. And as I wrote about last week, this latest version contains two important security fixes. Still, the small version badges (icons) showing supported Joomla versions are plastered across the Joomla Extensions Directory and developer's web sites.
The bad thing about showing these badges is that they give an impression that Joomla 1.6 and 1.7 are still supported versions. They are not. None of those versions are updated anymore, and they should not be used on any site.
But what about security updates, then? That's easy: Use version 2.5.3 (and later). That's the path to follow.
What about 1.5?
I have previously written about why you should migrate from Joomla 1.5 to the newest version. Even if 1.5 is not supported by the project anymore, it is possible to stay on it a while longer. I wouldn't recommend it, though (for reasons stated in the other post). The security fixes in 2.5.3 were not an issue for 1.5. They are related to 1.6/1.7/2.5.
Unless one decides to remove all of the 1.5 compatible extensions from the JED, I believe the Joomla 1.5 badges should stay. After all, a lof of people are still using that version.
If you are still on 1.5, go ahead and plan the migration now. You will have to do it at some point anyway.
Extensions developers - follow up
I will encourage everyone who develops extensions for Joomla to remove the 1.6 and 1.7 badges from their extensions. If they are compatible with 2.5, that is. Otherwise, they shouldn't be sold, in my opinion.
I also hope that the Joomla Extensions Directory will remove the 1.6 and 1.7 badges as soon as possible. If extensions are not compatible with either 1.5 (which many still sites use) or 2.5, I believe they shouldn't be on the JED at all.
At the moment, there is one supported version of Joomla: 2.5.3. Upgrade now!