You cant develop a polished game without the device to test it.
Emulators only partly represent the game/apps in action.

For development, the IpodTouch should be enough, if
you limit it to these features.
Also using the slowest device is good for
development to see perfromance glitches.
There might be some minor differences with the
different OS versions, but nothing you
need to bother at the start of your app development.
Its still good to have some frineds with other iPhone versions
to testcheck though.