The primary audience for this article is those who already have a working Android development environment, and are looking to get the latest and greatest from Google running in the emulator. Unfortunately, for me, the default emulator settings that ship with Ice Cream Sandwich (ICS) do not enable me to actually run an emulated instance of the application.
Fix the Ice Cream Sandwich Settings
To make everything work, I updated eclipse to the latest AVD and SDK versions using both the Eclipse updater, and the new SDK manager. Then I downloaded API Version 14 of the SDK, platform, etc. I opened the new AVD manager and created a new AVD targeting ICS.
The default properties of Max VM application heap size of 24 and Device ram size of 512 resulted in build errors for me. I increased these properties and the machine booted like a charm (albeit extremely slowly).
I increased the Max VM application heap size to 64 and the Device ram size to 1500. You may be able to get away with less, I haven't tried it. Make sure you have plenty of unused RAM before you attempt to increase the RAM available to the AVD.
That was it for me to get it working. Have fun and build some great applications!