You have to target the lowest platform as others say because that makes sure that you cover much more devices that are currently in use. I would recommend android 2.3 based on the current android versions on the currently active devices: http://opensignalmaps.com/reports/fragmentation.php
Your app will run fine even on tablets but you might wanna detect if it runs on a tablet and put together your UI much differnetly. Or in extreme cases you might wanna release a separate app for tablets (but android 2.3 can also be fine there). Our game was released with android 2.3 with 4 packages for mobile phones - because of the different texture compression formats supported by different gpus, and we released the game in 4 packages for tablets - the tablet version contains higher quality textures for each supported gpu.