Other answers are kind of deprecated now, because the Android emulator interface changed a little bit.
If you need to display hardware buttons on your Android emulator you have to followe these steps:
Open Android emulator devices
Click "Edit this AVD"
Select the first "Change" button beside the "hardware profile of the AVD"
Click "Edit device..." button
Uncheck this toggle.
Restart your emulator and you should see the hardware buttons now.