1) I port the code to the latest version of VirtueMart so that any security updates or bug fixes made to the core files I modify are also included in my module.
For the most part, the module will work with any recent version of VirtueMart. But of course, my files will overwrite core files and you could lose security updates.
You can upgrade VirtueMart and the re-apply the module, most of the time it should work. But it is not something I recommend, because I do not test compatibility for older module versions with every release of VirtueMart. It may break.
2) Any amount is fine. The more, the merrier, and the faster I'll release it publicly, but any and all donations are appreciated! I've received anything from $5 to $50 in the past.
Some modules are released right away because another client has paid for my time to add a feature or port it to the latest VirtueMart. I will not always need to use the "donation" basis. But again, the module *should* work with an upgraded VirtueMart, as long as you re-apply the files, and keep in mind that you've probably lost a security update or two by doing so.
I *always* recommend taking a full site backup before any upgrade anyway. Better yet, make a copy of the site and try the module out on the copy first. Akeeba backup is a really nice, free component for doing that. I highly recommend it.