If you had a project that was developed before the Mango SDK was available, or a project that was created with the Windows Phone 7.0 as the target platform and wanted to upgrade to 7.1, then there is no way to roll back to 7.0 again, which means that your app will be available only for those who have Mango updated devices.
On creating a new Windows Phone project with the Mango 7.1 SDK tools installed, Visual Studio prompts you for the target platform:
Because the referenced projects are not upgraded with the app, there is actually a way to roll back anyways, even if Visual Studio warns it is not possible.
On creating a new Windows Phone project with the Mango 7.1 SDK tools installed, Visual Studio prompts you for the target platform:
If for any reason, you want to upgrade the app to take advantage of the 7.1 SDK (use background agents, live tiles' animations etc..), you go to Project -> Project properties and set the target to OS7.1:
Once the Windows Phone OS7.1 version is selected, Visual Studio shows the following warning stating that once upgraded, the application cannot roll back to Windows Phone OS 7.0 anymore :
First in the WPAppManifest.xml you need to change the AppPlatformVersion back to "7.0". Then unload the project from Visual Studio and open your *.csproj with a text editor. Locate <TargetFrameworkProfile>WindowsPhone71</TargetFrameworkProfile> and change it to <TargetFrameworkProfile>WindowsPhone</TargetFrameworkProfile>.
Reload the project in Visual Studio, and voila, it's back to version 7.0.
Hope this helps.