The current (as of Dec 2008) iPhone SDK allows me to pick between 3 versions when I want to build an app: 2.0, 2.1, 2.2. -- I\'ll ignore 2.1 below.
My assumptions:
You can use the iPhone OS 2.2 SDK and still compile for iPhone OS 2.0; the way you do this is the same as for Mac OS X. The SDK you use determines the most recent version of the OS you want to use API from, while the Deployment Target you use determines the least recent version of the OS you want to run on. Both of these should generally be set at the project level in Xcode.
So you can build your software against the iPhone OS 2.2 SDK and, when running on devices with 2.2 or later installed, use 2.2 features. But you can set its Deployment Target to 2.0 and not use 2.2 features when running on a device with a pre-2.2 operating system installed and your application should work fine.