I like 10, because my laptop supports it, and the 590 in my desktop doesn't like the airplane charger.
9 is good because that's what the PS3 and XBOX 360 support.
11 is freakin' amazing because of the features it offers (hull shaders induce a Pavlovian response).
However, this is really a "target audience" question. If you're writing a paper, who comprises your target audience? Do you have to explain "pixel" or "floating point underflow?" Do you want to run on OLPC devices, or Sager custom laptops?
The Steam stats are a good start, but there are a few things to consider:
- What hardware do you have available right now to work on? If your PC is ten years old, it may be a good benchmark for what your clients will have, and actually writing and finishing a project is the biggest hurdle every game developer has to conquer.
- How long do you think it'll take to finish the game? Multiply that by four, and guess what most COTS PCs will have in terms of video capability at that point.
I've read that big game shops target next gen hardware for everything they do, and provide the ability to dial it back if necessary. However, building a game from scratch that targets multiple back-ends (DX9,DX10.*,DX11,OpenGL2/3/blah, OpenGL ES blah) is a huge task - in fact, some companies have built their business around it (Unreal).
DX10 is pretty safe because most hardware supports it and it provides a lot of capabilities and performance that DX9 doesn't, and a dev cycle of less than year is impractical if you're married or have a real job, so that's what I'm working with.