I am currently developing iPhone Apps, and I might probably get some work with some iPad Apps as well. Say I am allowed to buy just one device for testing, what should it be? IPhone, iPod Touch, or an iPad?

A2A Probably an iPhone. As an iOS Developer, you should get used to the experience of having an iPhone and feel what your users are going to feel. iPad is not that much of a mobile device. I mean people don't use iPads on the go as much as they use their iPhone. So get an iPhone and test iPad apps on simulator and hopefully, you will make enough money soon enough to be able to buy an iPad as well! Good luck :)

If you are going for iPhone 5, I would rather suggest you to buy an iPhone 4 and an iPad mini instead. In that way, you will have both the devices at your disposal. But if for some reasons, you can only buy one, then it should be the device for which you are going to develop the app. Simulator is close to actual device, but its not THE actual device. In fact, simulator provides you the most ideal ideal situation. For example, say location detection in an actual device isn't going to be that much fast as being detected in a simulator. Also, its difficult to test out various gestures and motions on a simulator.

If you are willing to invest in getting an iPhone 5, I would rather suggest buying an iPad 2 and an iPhone 4. This would cost about the same and would give you both an iPhone and an iPad for testing. If you would rather have just one device, get an iPad retina. You can test your iPhone apps on it in 1x/2x mode. But this is something I would strongly discourage. An iPad cannot simulate a lot of conditions which would existing on an iPhone - like an incoming call.

If you can buy only one device of those three, then ask yourself what is your target audience. The one on the phone or tablet?