Why is that the problem?

Just install Xcode 3.2.2, which does include support for the Simulator 3.1.3.

You can get it from http://connect.apple.com/ - select Developer Tools, find 3.2.2. in the page, download it, and install it to a directory other than the default /Developer, so your existing tools won't be affected. You might want to skip the installation of the developer utilities, since the ones from the current Xcode will be more up to date.

But you still are missing an important point. The Simulator is not an emulator. It does not run the same instruction set as the device itself. So the best way to test is still with actual devices running the versions of the OS you are interested in testing.