goto the following forum : forum.xda-developers.com/
search and see if specific threads exist for your mobile . if not look around in the forum for posts explaining how to upgrade 2.1 to 2.3.
yes , it is indeed possible . but be ready to tinker with ur phone a bit . it involves rooting ur phone (gaining access to root directory of ur phone) , flashing its os and installing custom roms .
step by step instructions are given and tools,roms are also given by developers in the forum . do it carefully and its an easy enough task.
warning - rooting will supposedly void your warranty . but tools are available for unrooting also . use at your discretion .
i rooted my xperia x8, flushed out all the unwanted SE junk , flashed and loaded 2.3.7 ( and very happy with it )