[citation][nom]feeddagoat[/nom]FRAGMENTATION!! If this is the only benefit to 3.2 why bother? I know google wanted to step up releases but a release for the sake of one is just annoying.[/citation]
If you pay attention its bug fixes and adds more hardware support. So it brings more devices under the same platform ... all of those Froyo 2.2 based tablets could upgrade to honeycomb, and 3.2, and 3.2 will install on the larger devices too (like the XOOM and Galaxy Tab 10.1). So this decreases fragmentation by pushing more hardware to the same version.
Also, the fragmentation argument is largely miss-understood. Most people assume this means that an app has to be re-written for every version of android, this is not the case. When you build an app you select the minimum version supported. For example, if I write an application for Android 2.2 it will run on any version of Android 2.2 or greater without me having to change my code. So that 2.2 app will run on my 3.1 honeycomb tablet.
This link shows the current breakdown % of all devices on different versions.
Based on this if you were to write your application with the 2.1 API it would be supported on 95.6% of devices without modification. If you select 2.2 API it will run on 74.4% of devices. Many of the 2.1 or lower android devices are going into their 2nd year since it was released. Based on trends most of those devices will be replaced by new 2.3+ or 3.1+ devices in the next 12 months and 2.1 will fall to the short percentages you see the 1.5 and 1.6 versions in.
This is just like writing software for say Windows 7 versus Windows ME, things change.
The major type of fragmentation that occurs with android devices has to do with screen size, say going from a phone to a tablet. Most graphics that look good on a phone when scaled to a tablet size loose quality. Hence why you can download a HD version of Angry Birds. This issue affects both Android an iOS alike as it has less to do with the operating system and the assets used to build the application. Also, with the scaling of size, generally user interface design needs to change to make better use of the space. Phones require a minimalist approach but having the larger screen allows for more usability. The iPad/iTouch has this same situation ... App Zoom makes a application fit the screen on the iPad but it does not redesign the app.
Also, Apple has at many times had different versions of iOS released for the different devices. Fragmentation occurs on their platform too, it is just more manageable as they are a single vendor with really only 2 product formats (phone / tablet). The iTouch and iPhone are basically the same device minus the phone service. This lets them keep the period of time when there is fragmentation to a minimum and as products become more popular (iPad) spend the time and resources to make sure updates to the version happen at the same time.