After you create an AVD it really does take a long time to initialize. On my less than year old Core2Duo 2.8 GHz running Win7x64 and 4Gb of RAM, initializing a 2.2 version took at least 5 to 10 minutes (if not longer). Once it starts initializing you can watch the logcat in the DDMS panel of eclipse and watch it unpack and install all of the apps in the emulator.