Google has a nice page here showing the ratios of the various versions of the Android OS running on existing devices. As you can see (if you visit the link), only about 30% of current users are on devices running 2.0 or higher.
This is sad. What's even sadder is that manufacturers are releasing new devices that are running versions earlier than 2.0.
This is particularly sad because Philip and I are working on a shiny new game that's going to be very, very awesome, and it only runs on 2.0. Why? Because we're using Google App Engine as the server, and to log in and authenticate to GAE, you have to have a Google Account. Android devices require a Google Account, and allow developers to write code that allows the user to login and authenticate Google services (such as Reader, Calendar, Gmail, and GAE) without have to enter their account information.
Sounds great, huh? It is, but the AccountManager API that allows this is only included in Android 2.0 on. We started working on an Android/GAE framework last year, and in that time I'd hoped that at least 1.5 would have been phased out and that the majority of users would by now be on 2.0. Alas, such is not the case.
The game is coming along very nicely, and hopefully will be ready for prime time within a few weeks. At that point we'll go ahead and release it, even though it will only work on a third of Android devices. Another option is to either release another version that will allow the user to manually enter their credentials. But then we'd have two versions of the app on the market, which would suck. Right now we're just going to plow ahead with the current version. When the time comes, it might be worthwhile to release two versions, though I hope we don't have to do that. Stay tuned.