i have 10.1 3.06 GHz….what do I upgrade to?

Do you mean you have the iMac10,1 (note the comma)? If so, your machine probably shipped with Snow Leopard 10.6.1. Use Software Update to make sure it’s now running Snow Leopard 10.6.8. Then if you want to upgrade, you can open the Mac App Store and purchase Mountain Lion 10.8.