As it figures, I got my new Lenovo laptop this week after returning from Japan, and during the Android installation I could not get the emulator to run.  In fact, IntelliJ also would not tell me what the problem was, it would just simply sit and spin and the emulator screens would not appear.

I started the AVD Manager itself and started one of my emulators from it directly.  I received the following error:

Invalid parameter: Files

Now, if you look at the emulator documentation you see there is no such parameter even close to this.  After doing some Googling I came across this page:

http://code.google.com/p/android/issues/detail?id=18317

So basically, this is a new bug that was introduced in r12 (the most recent release of the Android Tools).  The bug affects machines where the Android SDK path has a space in it, for example:

c:\Program Files (x86)\Android\Android-SDK

To fix this you have two options

1) Use the shorthand notation to reference the path, Windows uses this a lot under the hood, in my case the path becomes: c:\Progra~2\Android\Android-SDK.  I tried this but, IntelliJ does really respect these paths and expands them out to what they actually are.  I have read that Eclipse users are finding more success with this approach.  But it didn’t work for me.

2) I used this solution.  Basically, move the Android SDK out of the Program Files and somewhere else where the space is removed.  I admit, when I did this, I received much quirkiness in IntelliJ.  What I ended up having to do was uninstalled the SDK and reinstall at the new path by downloading the installer from http://dl.google.com/android/installer_r12-windows.exe.  Just specify a different path when prompted.  I choose: c:\Android.

You will still need to update your IDE to know this new path, but it will correct the problem

Google is promising an overriding fix for the future, not sure when though.  In the mean time, I hope this helps.