I just downloaded the Android 3.0 SDK and booted up an emulator with it. I rotated the emulator to portrait mode with Ctrl-F12 and then opened and the activity that was bui
I had the same problem, in my case when I rotated the emulator to portrait, the "desktop" would show correct. However the app would run upside down.
(This worked for v4 Ice Cream) So, in portrait mode, in the bottom right corner of the emulator, select the settings and set "Auto-rotate screen" to OFF. Run the app now and it will show correct.