SHA-1 is truncatable to 128 bits for applications that have limited space available for hashes. This limits the birthday paradox attack to a 2^64 effort, but MD5 isn't anywhere close to that anymore. (Incidentally, the output of birthday attack is an unchosen collision, just like Wang's.)Since you can't possibly mean absolutely suitable, can you clarify your basis for suitability? I'm not asking for a technical proof, just the general metrics used to make the determination. If 160 bit SHA1 is good enough for one application but not another, what does one need to know to decide for their own application?
SHA-1 isn't perfect, but we haven't known its been broken for a decade like we have for MD5.
--Dan