There was an interesting discussion about browser support in Boagworld's panel at the 2009 SXSW conference. (Start listening at about 44 minutes into the podcast. Yes, yes, I'm a little behind in my podcasts.)
When asked when web designers would no longer have to support IE6, Jeremy Keith rejected the very premise of the question - that "supporting" a browser was a simple "yes" or "no" decision. He argued that lessened functionality was OK in older browsers, and that no browser should be denied access to your content.
In my opinion, designing a site which degrades nicely while only testing in a few modern and high-traffic browsers is definitely the way to go.