I have spent a lot of time trying to get the Android SDK set up on Windows XP (with Titanium), but was getting the following error:

invalid command-line parameter: Files\Android\android-sdk\tools/emulator-arm.exe.

And this one:

C:\android-sdk11\tools\emulator.exe -avd titanium_7_HVGA -port 5560 -sdcard C:\Documents and Settings\ajones\.titanium\android2.sdcard -logcat '*:d *' -no-boot-anim -partition-size 128
invalid command-line parameter: and.

It is caused by this bug, where the SDK does not handle spaces in paths correctly.

Until the bug gets resolved, the most simple workaround at the moment is to use the previous version of the SDK, R11, which is still available at http://dl.google.com/android/installer_r11-windows.exe. Once installed, it will ask you which updates to download. Ensure you do not download the R12 release of the platform SDK! This should be the top item. Highlight it and choose Reject.

Update: better workarounds have been suggested in the comments.

This took many hours for me to get around - installing and uninstalling the SDK. A really poor bug for the Android team to release with, and I am not left with a good first impression of the Android SDK.

Update January 2012: pleased to say that this has been fixed in newer version’s.