For some reason google did not ship any notification sounds with the emulator and I can't find any reference on how to load some.
I've come accross this thread: How to play ringtone/alarm sound in Android But there is simply no "Media Application" besides the music player, so there is no way to set a ogg file (on the sdcard) as a notification sound.
How does one enable sounds on the emulator??
Wow, no responses. Weird.
Maybe this helps somebody. What I eventually did is to push some ogg files (ripped from my physical device) to the emulator's sdcard. I download the APK for Astro file manager http://forum.xda-developers.com/showthread.php?t=725624 and installed it using adb. I then used Astro to browse to the ogg files location and clicked on them one by one. This appears to have made it visible to the Android sounds settings applet.
I now have ringtones and notification sounds on my emulator and I can continue developing...