I had my app in the android market with version code = 2 and version name = 1.1
However, while updating it today, I changed the version code = 3 in the manifest but by mistake changed my version name to 1.0.1 and uploaded the apk to the market.
Now, will the users of my app get an update notification on their phones or not? Or should I redo the process again?
An internal version number. This number is used only to determine whether one version is more recent than another, with higher numbers indicating more recent versions. This is not the version number shown to users; that number is set by the versionName attribute. The value must be set as an integer, such as "100". You can define it however you want, as long as each successive version has a higher number. [...]
The version name shown to users. This attribute can be set as a raw string or as a reference to a string resource. The string has no other purpose than to be displayed to users. The versionCode attribute holds the significant version number used internally.
Reading that it's pretty clear that versionName is just something that's shown to the user, versionCode is what matters. Just keep increasing it and everything should be good.