I am hoping to develop the linux kernel, which version should I modify
 

There is a 3.0 in my hard disk, which I downloaded around Aug 10. There is 3.0.4 and 3.1-rc4 code. Which version should I use. Since I am a newbie, I think I don't need to use the newest version. Can I use my 3.0 version, or should I download a new one?
Maybe I can read the kernel source on the web, is there a way to use the source on web to make patches?
Thanks in advance.

Could you give some details about to modification you want to make on the kernal?

You can use any version that supports the function(s) you wish to modify. However you will need to confirm your changes still apply to later kernels - no need to download the full kernel each time, just the patch to update. Your changes need to be done locally AFAIK.

As you have a kernel source tree, look at the top level README, and in ../Documentation.