I found two versions of Amazon In-App Purchasing in SDK folder.
I successfully run and tested the sample App for version 1.0 using SDKTester, but could not test the sample App for version 2.0. ( "Buy Access to level 2" button remains disabled).
Can anybody explain what is the difference between version 1.0 and 2.0?
Which one should I use in my application?
To test out an app that uses Amazon IAP version 2.0 SDK, you have to use AppTester rather than SDKTester.
For differences between version 1.0 and 2.0, the "migrating from IAP v1 to v2 page" provides some good information => https://developer.amazon.com/public/apis/earn/in-app-purchasing/docs-v2/migrate-iapv1-apps-to-iapv2.