The different methods are indications of priority. As you've listed them, they're going from least to most important. I think how you specifically map them to debug logs in your code depends on the component or app you're working on, as well as how Android treats them on different build flavors (eng, userdebug, and user). I have done a fair amount of work in the native daemons in Android, and this is how I do it. It may not apply directly to your app, but there may be some common ground. If my explanation sounds vague, it's because some of this is more of an art than a science. My basic rule is to be as efficient as possible, ensure you can reasonably debug your component without killing the performance of the system, and always check for errors and log them.
V - Printouts of state at different intervals, or upon any events occurring which my component processes. Also possibly very detailed printouts of the payloads of messages/events that my component receives or sends.
D - Details of minor events that occur within my component, as well as payloads of messages/events that my component receives or sends.
I - The header of any messages/events that my component receives or sends, as well as any important pieces of the payload which are critical to my component's operation.
W - Anything that happens that is unusual or suspicious, but not necessarily an error.
E - Errors, meaning things that aren't supposed to happen when things are working as they should.
The biggest mistake I see people make is that they overuse things like V, D, and I, but never use W or E. If an error is, by definition, not supposed to happen, or should only happen very rarely, then it's extremely cheap for you to log a message when it occurs. On the other hand, if every time somebody presses a key you do a Log.i(), you're abusing the shared logging resource. Of course, use common sense and be careful with error logs for things outside of your control (like network errors), or those contained in tight loops.
Maybe Bad
Log.i("I am here");
Good
Log.e("I shouldn't be here");
With all this in mind, the closer your code gets to "production ready", the more you can restrict the base logging level for your code (you need V in alpha, D in beta, I in production, or possibly even W in production). You should run through some simple use cases and view the logs to ensure that you can still mostly understand what's happening as you apply more restrictive filtering. If you run with the filter below, you should still be able to tell what your app is doing, but maybe not get all the details.
logcat -v threadtime MyApp:I *:S