Use the command line <tt>$SDK/tools/android</tt>, or use the graphical Android AVD Manager (from within Eclipse: <tt>Window > AVD Manager</tt>).
$ $SDK/tools/android create avd -t android-10 -n NAME -c 2047M
Auto-selecting single ABI armeabi
Android 2.3.3 is a basic Android platform.
* to delete:
$ $SDK/tools/android delete avd -n NAME
After installation, fennec would crash on installation (unable to locate mozutils library, although it's in the apk). Possibly related to emulator failing to run NDK applications?