Setting up Android
Most of this information is available on Google's website at http://developer.android.com/sdk/index.html, but I've compiled it into one big easy-to-follow page.
Step 1 - Download and install the latest JDK.
As for Sept 2011, I haven't tried Java 7 yet, so you might want to stay with 6. Make sure you download the JDK.
Step 2 - Download and install the latest version of Eclipse
Eclipse seems to be the IDE of choice for Android development.
You can download the Eclipse IDE here at http://www.eclipse.org/downloads/packages/eclipse-ide-java-developers/indigosr1.
Step 3 - Downloading and install the Android SDK.
Download the appropriate installer or zip at http://developer.android.com/sdk/index.html, then run or extract as appropriate. Remember the SDK folder as we'll need to know this later.
Step 4 - Download and install the ADT plugin for Eclipse
The ADT ( Android Development Tools ) plugin adds several tools to Eclipse to allow you to build and publish your applications. Technically, this plugin is optional, but I'd highly recommend installing it.
Click on Help -> Install New Software.
Click on the Add button in the top-right corner
Choose a name (ie, ADT Plugin) and use the URL https://dl-ssl.google.com/android/eclipse/ for the Location.
Wait for a few seconds for the text Developer Tools to appear, tick the checkbox beside it, and hit Next.
Click Next on the following page.
Agree to the terms, then click Finish.
Wait for the install to finish, then restart Eclipse. You may need to press OK for a security warning.
Now, click on Window -> Preferences...
Select the new Android option on the left side.
Specify the SDK location from Step 3.
Step 5 - Download the applicable platforms (assuming using the ADT Plugin).
Click on Window -> Android SDK and AVD Manager
Cllick on Available packages
Drill down the Android Repository and choose the versions that you wish to code for.
Similarly, choose any 3rd party packages that you wish to use.
Click on Install Selected.
Accept the licenses and press OK.
Step 6 - Enjoy