Is it still possible to develop for older iOS devices?

Programmer Question

A few months ago I got an shocking email from Apple, telling that they will reject every app that is not built against iOS 4.x SDK. Now I wonder if:

1) is this a bad joke?

2) if not: does that mean that my app will only run on the very lates devices like iPhone4, iPod touch 4, or any device that has iOS 4.x installed?

I downloaded the latest iOS SDK and I can only build against 3.2 or 4.1, where I believe 3.2 is only for iPad. Now I can either throw away my 6 iPod touches with older OS installed or I'm lucky and there's still a way to code for them without upgrading them all to 4.1.

What do you think? What's the truth?

Find the answer here