Tony,
I just can tell you from my own (and my company's and clients' perspective), that about 40% our sites are still on DotNetNuke 4.9.5, about 30% on DNN Platform 6.2.9 and maybe 30% on DNN Platform 7.1.2. The sites on DNN 7 are a few new ones as well as the larger and more important upgraded sites (most of them directly from DotNetNuke 4.9.5), which needed new modules or community features. The biggest issues we faced during Upgrades were performance, the largest site didn't even come up after the upgrade until I fixed the SQL procedures (my original motivation for dnnTurbo, see http://dnnscript.codeplex.com), other sites had lost performance by 50%-75% while the memory footprint raised by around 400%.
When upgrading to DNN 6 or DNN 7, we had a few modules, we needed to replace, but usually the upgrades went without real problems (the single module I never succeeded to upgrade was Blog 4 to Blog 6, but Blog 4 still runs fine on DNN 7).
Our DotNetNuke 4 sites still run fine, save and fast - we just needed to replace FckEditor 2 with CKEditor 4 for security and usability reasons (thanks to Ingo, CKEditor still supports DotNetNuke 4), and update the skins to replace SolPart menu.
What does this mean for Extension Developers - should they support DNN versions down to version 4? I wouldn't advise - we don't install any new modules on the old sites - if there are new requirements, we will start upgrading to a current platform product first.