It is not a problem with your environment; it is just that the old emulator from Eclipse is very slow.
Practically, I use a real phone to do my tests. It is faster and tests are more realistic. But if you want to test your application on a lot of different Android versions and don't want to buy several phones, you will have to use the emulator from time to time.
UPDATE: The Android SDK now allows to use an x86-based Android emulator. See
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