I have to admit to struggling to get this to work.
(see this original article)
Basically it seems that the best way is to use Eclipse as the software development interface with the Android kit as a ‘Plug in’. Don’t use the latest version of Eclipse though!
Full installation instructions are here:
be warned that the downloads are 100s of Mb so might take a while.
This operation isn’t for the feint hearted and (I suspect) is going to have to be a LOT easier if we want pupils to use it!