I have begun evaluating MonoDroid. (I’ve built many apps using Android+Eclipse)
I created new-from-template Android app using MonoDevelop on a Mac. I started up a new Virtual Device with 250 megs. API level 15.
The error I get is that MonoDroid can’t install the runtime as there isn’t enough space.
See image below:

Xamarin recommends starting the emulator with a partition-size of 512MB in order to have enough room for the installation. If you start the emulator from within MonoDevelop or Visual Studio, it will actually do this automatically. If you’re starting the emulator yourself, you need to do something like:
More details can be found in their documentation here.