Android development has been grappling with this question, and also with the realisation that most tablet apps are more likely to be usable in landscape than portrait mode. (Some Android apps, including BT Fon, haven't realised this yet.)
A related issue is that recent Android releases include many facilities that help tablet-based apps. Conventional wisdom is tht you need to design an app so that it can be used on earlier versions than the one you develop it for, and obviously this can increase the size of your potential market. But if you do that, it may mean that you have to make compromises that mean you can't use the later tablet-specific Android features.
My solution? I've taken the view that nothing running on Android releases before 2.3 (Gingerbread) really supports tablets. Version 3.0 (Honeycomb) is the first that really supports them properly. I've been developing for 3.2 (Honeycomb MR2) and version 4 (Ice Cream Sandwich) is now available. I've set the "minimum API level" for PCDB SuDoku Solver to 2.3, but so far haven't been able to persuade the Android emulator to let me try and run it on that version. It looks like initial releases won't run on anything before 3.0. I've specified a minimum screen size of 600 x 1024, which is just about big enough to handle precise screen touches.
(Don't you just love the Android release names?)