Yes, you need windows 8. No, it won't work on Visual Studio 2010 - but that also doesn't mean that you need Visual Studio 2012 - you can use Visual Studio Express 2012 for Windows Phone
Also keep in mind that the emulator for this uses Hyper-V, so you'll need a machine capable of running in hypervisor mode. Full system requirements are listed on the linked page (x64, win 8 pro, hyper-v, SLAT, etc)