It'll be there forever (compatibility), but the problem is there's not a lot of overlap between 1.x and 3.x/4.x. I think people are better sticking to the 3.x core profile. Shaders just aren't that hard and fixed function is a really outdated way of thinking.
Generally I'd also say stick with 3.x (rather than 4.x) unless you need tesselation shaders.
I believe with the latest versions of the APIs, the fixed function pipeline stuff is now emulated in the programmable pipeline, but the two don't mesh well, so you end up with particularly bad performance. I've had to find and install the old DX9 runtime to get some older games to run at reasonable frame rate.
Generally I'd also say stick with 3.x (rather than 4.x) unless you need tesselation shaders.