The testnet setting is just for backwards compatibility and affects only the flag output by various API calls. To use testnet-style addresses, set the blockchain parameters to match the information listed here:
https://en.bitcoin.it/wiki/List_of_address_prefixes
Specifically, you want the values:
address-pubkeyhash-version=6F
address-scripthash-version=C4
private-key-version=EF
address-checksum-value=00000000