I see a lot of posts about writing to the SD card, but I believe my problem is different. I am unable to create the SD card during the process of building an AVD.
I
I had a different problem: platform-tools was in my path but tools was not. So, everything worked except that the SDCard image was not created. There was no notice of this when I created the avd in eclipse and the virtual device was created with a really small sd card causing it to constantly throw the media not available error on app install.