The firmware is not interchangeable between the different N95 phones (to my knowledge). Each phone has a different model number (i.e. RM-160), which the Nokia Software Updater would recognize and only allow the applicable firmware.
As for the models....
N95-1 was the original N95- EURO version, which does not support North American 3G bands. It also has half the memory as the N95-2 and N95-3.
N95-2 is the black w/ 8gig of internal storage. It also has a larger display, has more memory, and supports demand paging (Pseudofinn correct me if I am wrong here

) This model also has a larger battery, and no longer has the camera lens cover we saw in the N95-1.
N95-3 is the North American version which sports 3G support and a memory increase over the N95-1. It also lacks the lens cover and sports a larger battery.
Hope this answers your question.