I have two websites that are both running in shared mode in Windows Azure. I only want to update one of them to Reserved Mode, but unfortunately when I try to do so it says that it needs to upgrade all websites to Reserved Mode.

This isn’t really a problem, but my question is – will I get charged for one Reserved instance or two? Does it put both sites on one reserved instance? If so, how does this affect pricing?
Both of your shared websites will go under 1 Reserved instance thus you will be paying for just 1 reserved instance.