I am trying to distribute an iPhone App to the App Store for the first time. Currently, I am following this guide: Submitting iPhone Apps To The Apple App Store – A Step by Step Guide. Currently, I am on the step where I have to set the Base SDK field value. See, the screenshot.
As you can see, iOS 5.1 is the only choice available there. Now, if I set it as Latest iOS(iOS 5.1) – the default value – will the distributed app will be able to run on older OS’s, for example iOS 3 or iOS 4? If not, then what will I do to make it run on older OS. Or, is there anything I misunderstood about BaseSDK?
No worry it will function in the older os you need to keep the deployment target minimum SDK which you can find in the picture if you updated the xcode with simulators of IOS 4 and 5 you can get these options

Update
Basically it means that you’re going to be able to use all the API that is public in 5.1 SDK. This has nothing to do with “Which phone your app can run on”.
iOS deployment target on the other hand, is asking you which devices can this app run. This is quite a dangerous question, since you can then say from iOS 3.0 to 5.1 for example. This means that your app can be installed in any iPhones running iOS 3.0 to 5.1, no matter what the phone is. That means the original iPhone and iPhone 3G can run your app if they have at least iOS 3.0 installed. You should test your app carefully if you decide to do this. Apple does not provide any way to test on older OS. You’d have to devise that strategy yourself.