Overall, using the most recent version of Android for development is the way to go. (E.g.: Pre-honeycomb versions stored raster data of images/bitmaps in native memory, thus the Memory Analyzer Tool, when you searched for memory leaks not showed the actual size of a bitmap leaked, just a few hundreds of bytes.)
On the other hand, vendors are customizing their phones, they have different drivers for example the camera. So testing only on one phone, in some situations might not be enough… I’d advise to have an older phone (with low available memory, pre-honeycomb os), and a newer one…
You should integrate ACRA, or other crash reporter tool, that enables you to track your product out in the wild. Bugsense or similar solutions provide you a nice Web interface, where you can see the different Exceptions that occured in your code for users…
If you don’t have access to an actual phone, TestDroid from bitbar.com can provide a solution, as they have a cloud of different android phones (>100) where you can execute your test cases…
As for downgrading, I don’t know if that is supported…
solved Google Nexus 4 for Android Development? [closed]