I have always configured and used Android SDK from Eclipse. In fact, ADT (Android Development Kit) bundle now comes with Eclipse IDE pre-configured for Android development. This makes using the SDK very easy. Options like configuring SDK manager and virtual device manager are available right from Eclipse menu.
However, I had a requirement where I wanted to run only Android emulator and not IDE. The Android SDK site has all the information to do this, but not in one easy to find place. So I thought I will write about it, for my own reference.