I am trying to create an Android project on Windows using Cordova 2.2.0 (PhoneGap). According to this blog post this command should work -
To be clear, your target project path should be to be where you want the project to be created and then the last directory will be what you want to be created. For example:
./create ./test2 com.mytest MyTest
In this case you want to create a project in the current directory in a new folder called "test2" and this folder has not been created yet (it will be created when this is run).
UPDATE: If you are using a newer verison of the Cordova Edge or greater, i highly recommend using the Cordova CLI Utility here: http://cordova.apache.org/docs/en/edge/guide_cli_index.md.html#The%20Command-Line%20Interface