I had this problem when upgrading from Eclipse/Helios to Eclipse/Juno.
I set up the IDE and then imported an existing (working) project. If I then ran it in the emulator it ran but in its original version although the java code was for the latest version.
I then did a Clean (as explained in many other posts) and a (re) build but then ended up with host of errors due toSmissing R.java file.
The problem turned out to be some 'errors' in the layout xml files which had not been recognised by Eclipse/Helios. Specifically, in my case, there were some layout_width='match-parent' (and height) settings which Juno objected to. I tried changing those directly in the xml files but Juno wasn't having it and still reported it as a 'match-parent' error (although it had clearly been changed).
The only thing to do was to go to the graphical layout, right-click to get Properties and then change the Width and Height properties there. Also, as they were already showing as 'fill-parent', I had to first change them to 'wrap-content' and then change them back to 'fill-parent'.
Once I'd done that for all instances of 'match-parent' I could then do a build and run the latest version in the emulator.