I got my phone for $50 in promotion and it DOES support MIDP 2.0 (it is Motorola V300). I think it was already out there one year ago. Anyway, most of other phones indeed support only MIDP 1.0. I have also not seen any phone with CLDC 1.1 (better ones have Personal Java set).
In short - use the phone you have. Pair it with emulator from maker of that phone. This way you will be able to show something on real hardware when project finish.
If you want to have more abitious project, then focus on portability, not on the application itself. You will need more phones to play with and you can expect a lot more trouble. You might want to look at http://www.jtgl.org/
, I have not used it myself, but looks acceptable if you really want to go into portability stuff.