I am getting this bad version error as shown below. How to fix this. Do I need to have a separate jar file for each version of java?

(source: sourceforge.net)
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Is this a plugin that you created, or did you download it from somewhere?
I’ve never seen this myself, but I suspect that you are running Eclipse using an older version of Java (e.g. 1.5) and trying to use a plugin that was compiled for Java 1.6. Assuming that is the case you can:
No. A JAR file built for a Java 1.5 target platform should also work on a Java 1.6 platform. (Just not the other way around …)