To add to the HXCaine, if you want to create sd card, you can make use of the "mksdcard.exe" present in the tools directory of the Android SDK.
When creating the emulator there select the file which is created through the mksdcard.exe file.
For selecting for the already created Emulator, In Eclipse go to
Window->Android SDK & AVD Manager -> Select the AVD -> Edit -> SDCard section select the File radio button and then browse to the file which is created through mksdcard.exe
Save the changes and restart the emulator.
Regards,
SSuman185