Today I upgraded to Android SDK 2.3 and I also upgraded the Eclipse Plugin Androi Developer Tools 8.0 (from 0.9.9). I also upgraded my Java Development Kit to 1.6_22.
No
Remove the folder libs in your project
tl;dr: also check for stale SDK paths in the "local.properties" file.
Here's how I fixed it: I went through the answer given by Richard Le Mesurier, and also checked the path to the Android SDK in Window > Preferences > Android as mentioned by CommonsWare (since I did indeed change the SDK directory a while ago), however it still couldn't find it.
Then I noticed that I had a file called "local.properties" which referenced the old location for "sdk.dir". I changed that to the new location to match what was in Window > Preferences > Android. Then deselected the build target in Project > Properties > Android, hit Apply, re-selected it, and hit OK and cleaned the project. That worked! Thanks all!
Another possible explanation is that Eclipse has forgotten its Android plugin. This can happen if you switch workspaces, as happened in my case. I tried to re-import an existing Android project, and it couldn't find the basic java system libraries, since it was pointing to the standard android jars. Reinstalling the android plugin (Help->Eclipse Marketplace, then search for "Android" and pick "Android Development Tools for Eclipse") fixes it.
Try to create new project like this then try it
In my case, The JRE went missing (disapear from Eclipse option).
All I did to fix this is re-add the JRE under Windows -> Preferences -> Java -> Installed JREs.
mine was located at /System/Library/Java/JavaVirtualMachines/1.6.0.jdk/Contents/Home
I right clicked project and Closed it. Then reopened it. That fixed the problem.