The short version of my issue at hand,
When it says JDK not found, just press ‘back’ button and then press again ‘next’ button..
I got this from the bottom of this post: http://codearetoy.wordpress.com/2010/12/23/jdk-not-found-on-installing-android-sdk/
If SDK Setup.exe fails, please try to open a command-prompt and run "tools\android.bat" manually. That's all what SDK Setup does, however the current version has a bug in that it doesn't display errors that the batch might output:
> cd <your-sdk>\tools
> android.bat
That way you may see a more useful error message.
You must have a java.exe on your %PATH%.
I initially had this problem and I believe it was because I did not have the 64 bit version of Eclipse.
My problem was installing the Android SDK in Eclipse Helios on Windows 7 Enterprise 64bit, I was getting the following error:
Missing requirement: Android Development Tools 0.9.7.v201005071157-36220 (com.android.ide.eclipse.adt.feature.group 0.9.7.v201005071157-36220) requires 'org.eclipse.jdt.junit 0.0.0' but it could not be found
Having followed the advice above to ensure that the JDK was in my PATH variable (it wasn't), installation went smoothly. I guess the error was somewhat spurious (incidentally if you're looking for the JARs that correspond to that class, they were in my profile rather than the Eclipse installation directory)
So, check that PATH variable!
just press the back button and then next button...jdk found :D
Found a solution that modifies the android.bat to allow you to start and run the android sdk and avd manager on the x64 jdk. So far I've been able to start it updating, but I don't know what other implications running the emulator and compiling against the x64 jdk will have.
http://code.google.com/p/android/issues/detail?id=3917
good luck.