Found the answer - I tried to instrument the unit test as well.
So here is the short version of successfully building a Unit test and getting code coverage
In Eclipse, for your project, open Properties->Java Build Path and select the "Libraries"-tab. Press "Add External JARs..." and select emma.jar form your SDK.([...]/sdk/tools/lib/emma.jar)
Select the "Order and Export" tab and select to export emma.jar.
Open a terminal and change directory to the root of your project-to-be-tested.
android update project --path $PWD --name [YOUR PROJECT NAME] --target android-17 --subprojects
Create a test project.
android create test-project -m ../ -n MyAppTest -p tests
Write your test cases in the new test project
When it is time to test first build a instrumented build of the project-to-be-tested and then build and execute the tests
ant clean instrument
cd tests
ant debug emma install test
You will find the coverage report in tests/bin
Cheers!