Is a device required to sign & submit paid applications to the android market place?

You don't need to buy it.
But, you may need to test your application with real hardware for your customers.

Definitively not needed, but it's way better to test in real conditions to see how it behave without a mouse (but with big fingers ), without a keyboard, on a tiny screen, etc...

When I posted the first version of Word Prospector on the market, the device hadn't shipped yet in France ( where I live ), so I couldn't test it.
When I finally get the device and tested my application, I realized that the buttons were way too small for the game to be comfortable...