I'm a developer on a fairly high profile Android app. We target Android 1.5 (the oldest version with significant market share), and we've had very few problems

I'm a developer on a fairly high profile Android app. We target Android 1.5 (the oldest version with significant market share), and we've had very few problems with fragmentation. Our app works just as well on a G1 as it does on a Nexus or EVO with Sense. If you use the SDK right it's fairly effortless. With a little runtime checking, you can even add support for new features in new OS versions while remaining compatible with 1.5 (unit tests help a lot for this). If it works on the G1, it'll work pretty well on other devices if you're careful about the assumptions you make. Honestly, the hardest part has been producing separate assets of all our images for different resolutions. Granted, we're not doing anything with OpenGL, my understanding is that gets much more complicated.