Most old people I know, have no understanding of computers (both hardware and software).
My dad and some of the people who work with him (late 50's) have spent most of their lives working with computers (ie one guy used to work on Cray supercomputers in the 70's!), so are very computer-literate. However I realise this may not be the norm.
However, there are two (or more) factors at work here:
1) Computers are not very user-friendly (far less so than cars or other consumer appliances). Even with Windows XP it can be very hard to figure out what is actually wrong with a computer when it crashes (and it is when
, not if). The old joke in the computer industry is that if cars had progressed as fast as computers they would all get 1000 miles to the gallon and be able to drive themselves. The old joke in the car industry is that if cars worked like computers they would crash twice a day and ask the driver to "reboot" every 5 minutes.
2) Generally as people get older it is harder to learn new things (languages, technologies etc). Also, unless they are really interested in computers there is really nothing you NEED to use a computer for. ie banking, shopping, telephone, work etc. You might need to use a computer at work but that's it. So you really need to be very highly motivated to learn such a new technology later in life.