I'm using Xperia X8 but I can't install Paypal for Android from Android Market but one of my friend already installed.
That's because he might be from U.S or canada and you maybe from india. Same goes with the appstore there is no app for indians.
That is strange, if your friend has the app, you should be able to get it but it might be 2.2 compatible only.
The U.S website is different and also it functions differently so is the app as it has different options for U.S people and its developed for them.Paypal might develop the app for we indians too in near future but for now its not available.
Whihc Android versions HANDSET can have Paypal, Skype, Gtalk apps for Indian users? I'm planning for iphone4, or iphone5, or Samsung Galaxy S2 but I want to be sure that wthr I can run those apps or not
Paypal app is not visible on Android Market in certain countries, including India. If you still want it: Root your Android phone Install MarketAccess Open MarketAccess, backup your current carrier id number and emulate your carrier as a US based one like T-Mobile Close it and open Android Market. Now you will see the prices in $ instead of Rs. Search for Paypal app and install it Exit Android Market and open MarketAccess. Restore your original carrier id number which you took a backup. Close it and check Android Market to make sure the prices are back in Rs and not $.
What account limitation? I have been doing this for about 8 months and I have never seen anyone report their Google account on Android phone to be limited due to this or any other action.