How to handle RTL languages on pre 4.2 versions of Android?
Sadly, I don't think there's a good solution ("good" meaning "does the job and is readily available"). For our own Android apps that support Hebrew, we use a custom rendering mechanism that we developed over many years. The rendering mechanism does everything: proprietary fonts; bidirectional (bidi) analysis; glyph placement; line break analysis; text flow; etc. Some of the problems trying to use native Android text handling capabilities (especially pre-4.2) are:
Really crappy fonts. However, you can package third-party fonts like DejaVu that are pretty good. The right font can do wonders with positioning of nekudot—and te'amim1, if you need that. (I agree with you about how important correct pointing placement is; reading Hebrew text with misplaced nekudot is like reading a screen-full of CAPTCHAs.)
Buggy bidi analysis. What makes it worse is that the bugs seem to be different for different versions of Android. Modifying the text to include strategically placed bidi formatting codes (RTL mark; LTR mark; etc.) can overcome many of these bugs (see the discussion here, which isn't specific to Android). However, it's a nuisance to do this and, because of the inconsistencies among Android versions, it is difficult to predict in advance what help the framework is going to need.
No (or poorly thought out) framework-level awareness of right-to-left issues. For instance, good luck getting the scroll bar to display on the left side of a Hebrew TextView. For our apps, we had to build an entire scroll-bar system just to get this to work how we wanted. (Good think Android is open source!)
Poor line and word break analysis. At least one early version of Android on which we tested thought that each nikud mark was a word boundary. When it comes to line breaks, the system often doesn't know how to handle Hebrew punctuation like maqaf, gershayim, or sof pasuk.
Some of the newer Unicode characters (like HOLAM HASER FOR VAV—U+05BA—new to Unicode 5.0) are not recognized as Hebrew script by the system.
My recommendation is that, unless you are prepared to build a top-to-bottom text handling system yourself, you give up on high-quality text display on pre-4.2 versions of Android, particularly if you need to support nekudot and te'amim. Also, plan to use the techniques I mentioned in the first two points above.
1 biblical cantillation marks
As of August 2013, Android has posted API documentation for a Bi Directional Formatter which might suit your needs. This is contained in the Android Support v4 library which I believe should run in versions prior to Android 4.2.
Refer to: http://developer.android.com/reference/android/support/v4/text/BidiFormatter.html