This problem happens to me after SDK updates when I am using any device based directly on the default Device definitions.
Furthermore: any new virtual device created with the default device definitions (Nexus 7, Nexus S, etc) gives directly the same error.
My solution is to duplicate these definitions:
- In Android Virtual Device Manager / Device definitions -> select the definition to use, and press Edit. Provide a new name and press the button 'Clone Device'.
- Now, create the new virtual device using this cloned configuration.
- The new device does not raise any longer the invalid configuration error messages.