You don't have to number the equations by yourself. Let LaTeX do the heavy lifting. You can just give names to the equations and refer to them by their names:

\documentclass{article}
\usepackage{amsmath}
\begin{document}
Equation~\ref{xsquared} shows that the universe is
infinite, but equation~\ref{ysquared} says otherwise.
\begin{equation}\label{xsquared}
a = x^2
\end{equation}
\begin{equation}\label{ysquared}
b = y^2
\end{equation}
\end{document}
If you insert an equation before it, LaTeX will do the numbering by itself:

\documentclass{article}
\usepackage{amsmath}
\begin{document}
Equation~\ref{answer} is the Answer to Life, the Universe and Everything
Equation~\ref{xsquared} shows that the universe is
infinite, but equation~\ref{ysquared} says otherwise.
\begin{equation}\label{answer}
x = y = 42
\end{equation}
\begin{equation}\label{xsquared}
a = x^2
\end{equation}
\begin{equation}\label{ysquared}
b = y^2
\end{equation}
\end{document}
Getting fancy :)
Barbara Beeton pointed a few problems with my previous answer.
An empty line between an \end{equation} and the next \begin{equation} will create an extra empty space between the equations, so I removed them.
Notice also the ugly spacing between equations (1) and (2) in the previous figure. The gather environment from amsmath allows multiple equations inside the same environment and makes the spacing between them correct. At the same time, it allows one label per equation the same way that the three equation environments allowed:

\documentclass{article}
\usepackage{amsmath}
\begin{document}
Equation~\ref{answer} is the Answer to Life, the Universe and Everything
Equation~\ref{xsquared} shows that the universe is
infinite, but equation~\ref{ysquared} says otherwise.
\begin{gather}
x = y = 42\label{answer}\\
a = x^2\label{xsquared}\\
b = y^2\label{ysquared}
\end{gather}
\end{document}
Much better now :)