Absolutely. Think about it. It is the basic construct of Android. The OS will optimize all your Activity’s. The other choice you have is one Activity and multiple Views. Just change the view as you navigate across your application. But you will have to manage the back button stack.
THATS LAME!!! You are a java developer if you choose option 2, not a Android developer. Dont waste your time managing stuff that the framework does well. Develop using one Activity for one UI screen, and navigate using Intents.
Use the UIThread judiciously, and multi task the business logic.
Create a layer for your the data. Design using some good patterns. And DONT use only MVC since you know it, pick up the patterns book and study :).
Use Junit for your testing. I use Junit 4, works well.