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Android 2.1, 2.2 and 2.3.x firmware releases now comprise 92% of the total handsets accessing the Android Market making it a safe target for your applications.
Data about the number of devices running a given version of the Android platform is routinely collected in order to help developers decide how to prioritize their development effort in targeting platform versions. From the developers point of view it lets us know how fragmented the market is.
Figures for the first half of March show that Android 2.2 (Froyo) currently dominates with 61.3% of the market with Android 2.1 (Eclair) having 29.0%. Gingerbread (2.3.x) currently only has 1.7% and Honeycomb (Android 3.0) accounts for only 0.2%. - which isn't unreasonable given how recently it was released and how few tablets are currently available.

(Click chart to expand)
As Andoid 2.x usage has increased the percentages using Android 1.5 and 1.6 have fallen and now stand at 3% and 3.8% respectively. The above chart, from Android Developers shows how they have been squeezed over the past six months.

So if you want to target the Android Market Froyo is currently your best bet.
See also:
Android apps on the rise
The remarkable spread of Android
Android Apps Marketing (book review)
Introduction to Android 2 application development
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