I'm not sure if this is your issue, but here's how I fixed mine.

I always had this "No DNS servers found" error when starting the emulator and did a lot of research on google to no avail. Anyway, I found a post somewhere (can't find it anymore) that was saying that the number of NICs, number of DNS entries could affect the emulator. Also, knowing that the emulator uses a Windows API function (GetNetworkParams()) to resolve DNS entries, I couldn't rely on the %WINDOWS%\System32\Hosts file.

However, I did went in the NICs properties (on Windows 7) to find that I was specifying a static IP, but no DNS entries. So, I got the DNS entries from my router and plugged them in the NICs property. I restarted the emulator and it is now using the correct DNS entries!

I can use my internet connection with the emulator now, and it works wonders!

Hope it helps!