Now that iPhone SDK 4.0 is available for download, and iOS 4.0 will be available for consumers shortly, does it make sense to start using the new features available in the 4
The recommended configuration is to set Base SDK to highest (i.e. 4.0) and Deployment Target to appropriate version (depends what framework feature is used in your app).
Of course, the app can always check OS version and skip calls to un-supported frameworks. It is a common technique to build iPad and iPhone universal apps.