Is there any kit or board on which I can test out customized android os?
You can use a Beagle Board.
Check also the IGEPv2 board. It has Ethernet and WiFi.
I would suggest having a look at a chinese MID. They can be had for 100$ online, but if you have the chance to buy one in china you can get one for around half that price in a copy market. While offering a lower product quality you can get started for a lower price than any development board. One of the tablets I bought gives me a Wondermedia armv5 compatible processor with 256mb ram and 2gb flash memory which is a way better deal than the friendly arm compatible kit I used at work.