Is 2.9 Caremen a template or is 2.9 just called Carmen

Is 2.9 wordpress called Carmen

Yes. Each main version is named after a jazz personality – although the name isn’t normally used outside of the development group.

or is it an actual theme?

It’s entirely possible that there’s also a theme called Carmen out there somewhere but that would be just be pure coincidence.

Is it better to wait to get 2.9 after all bugs etc are taken out since it is new?

No.

If it’s a new install, then all you need to know is the current version (2.9.2) is stable. There’s no benefit to waiting until 3.0 unless you’re also considering WordPress MU.

If you are already running WordPress then you should always upgrade to the latest version as soon as possible. Running an old version greatly increases the likelihood of your site being hacked.