Here is one more thing that I ran into, that some of you may be having trouble with.  It stumped me for a bit, but I figured out what was the issue.  This may not affect everyone.  (FYI: I am using Processing version 2.0.1)

Processing seems to want to connect to an Android emulator on port 5566, and it doesn't seem to want to look at any other ports.  You CAN change this in the preferences.txt file, but it seems to change it BACK to 5566 whenever you restart Processing.  This may affect you if you have OTHER Android virtual devices in your AVD Manager.  Depending on the devices you have in your AVD Manager, and what order they are in, you may need to edit preferences.txt so that it has the right port number of the AVD created by Processing.

For example, I already had a "Nexus One" AVD in my AVD Manager before I even installed Processing. For some reason, in order for Android Processing to work I had to do one of two things:

(1) First start my Nexus One AVD, which would be assigned to run on port 5554.  Then tell Processing to build and run, and it would then start the Processing AVD on port 5566.

(2) Start the Processing AVD manually from the AVD Manager, which would then be assigned port 5554.  I would then need to edit preferences.txt to use this port.

For some reason, simply having the Nexus One AVD in my AVD Manager blocked Processing from starting up its own Processing AVD unless I either (1) started up the Nexus One AVD first, or (2) started up the Processing AVD myself.  When I deleted the Nexus One AVD, it solved this problem, and Processing was able to start up the AVD all on its own.  But this may not be an option for everyone.

Hopefully this info helps out a few of you who are frustrated!