I wanted to know how to virtually create sd card in the emulator. Also I wanted to know where the app is really installed on the device.Is it in sd card or in internal memory..T
you can find your app stored location using DDMS in Eclipse. Usually you app will under data->data->
If you want to use SD Card functionality in your Emulator then add new hardware SD Card Support. This option is avaible when you created new avd.
The above is answering your question related to your emulator SD card.
For installed app location follow this link:
Difference between Emulator and Real Device for Installed applications?