Its because of the spaces in "Program Files (x86)".
From the eclipse menu bar do this
- Go to Window > Preferences
- Click Android
- At the "SDK Location bar" change it from C:\Program Files (x86)\Android\android-sdk to C:\Progra~2\Android\android-sdk
It should work perfectly now. (However if you're using a 32bit system then you'd have to change it to 'Progra~1' not 2.)