LG OPTIMUS GT540 is an awesome phone but it is shipped with old version of Android (1.6) which lacks the support for most of the latest Android Apps you find in the Android Market.
But the good news is LG provides an official upgrade to Android 2.1. You can follow the official tutorial to upgrade your phone to 2.1.
Some tips on upgrade
Step 1: Make sure your phone is not on mass storage. This will make the computer pick your phone up.
Step 2: Connect your GT540
Step 3: Open the update program.
Step 4: Download drivers and install.
Step 5: Click ‘Start Updating’ and follow the instruction
Step 6: Have patience
Step 7: Enjoy your 2.1 phone
WARNING: Never ever unplug your phone or remove your battery while the updater executing.
If the official upgrade is not working for you don’t worry you can upgrade manually. It’ll be more like official upgrade unofficial way :). Follow this tutorial to finish off the upgrade. I also had update problem so went with this unofficial way and it did work without a hassle.