Change directory to the sdk tools directory say
cd ~/android-sdk-windows/tools/
1) List the avd target
android list targets
and you will see
id: 1 or "android-8"
Name: Android 2.2
Type: Platform
API level: 8
Revision: 2
Skins: HVGA (default), QVGA, WQVGA400, WQVGA432, WVGA800, WVGA854
2) create avd witth andorid 2.2 and sdcard 500M
android create avd -n android-8 -t 1 -c 500M
3) List avds
android list avds
4) Start emulator
emulator -avd android-8 &