Setup:
Required Softwares: 

      JDK (1.5 or later) 
        download from here :http://www.oracle.com/technetwork/java/javase/downloads/index.html

     ADT Bundle 

      download from here :http://developer.android.com/sdk/index.html

Installation Procedure:

1. Install JDK 
2. Unzip ADT Bundle inside you will find two folders called eclipse,sdk. 
3. do not separate eclipse and sdk from ADT bundle folder. 
4. open eclipse folder and you will find eclipse application file just run that file it is going to open eclipse IDE after you can start android application development. 

Creating AVD(emulater):

1. In eclipse go to window menu run android virtual device manager and choose new option and give the details device name , device , version means in which version you want to create AVD and click ok button.