Android fragmentation has been a widely-discussed topic for quite some time. According to developer Nick Bradbury, though, it's not as big of a deal as the media makes it out to be. He acknowledges that there are some problems - Incompatibilities between the large number of OS releases are a bigger one, compared to differences between devices, for example - but all it really takes, Bradbury suggests, is a little bit of forethought and caution:
Another problem is the number of inexpensive, low-powered Android devices in use – especially outside the US. If you want your apps to run well on them, you have to be extra-cautious about memory consumption and performance (but then, you should be anyway).
Bradbury also points to the continued prevalence of Android 2.3 as a fairly universal pain point for Android developers. Ultimately, though, his point remains the same: It may be ugly at times, and iOS developers might be horrified by it, but Android fragmentation is manageable.
Beyond his basic point, Bradbury points to some helpful resources. First, he provides a breakdown of Android users by OS, so you know what you're dealing with:
And also the Android Issue Tracker, which can help you keep track of all the changes and bug fixes in Android that are breaking your app between releases. Check out Bradbury's full article for more details.