frnskm on "new on wp themes. how it works?"

Hi guys, im new on wp themes, and im trying to figure out how to use it.
im currently using this theme, http://www.dessign.net/simplephototheme
overall i like this theme, but there are a few things id like to change.

is it recomended to install this theme, and start changing the code, to make it look the way i want?

is this the way it works?

someone told me i shoudnt do it, because when they release an update, i will loose all the changes ive done.

so, whats the correct way to use a theme?
1 - pick one, and change whatever is necessary to make it look the way i need.
2 - pick one, and accept that it is not 100% the way id like it to be?

tks