The build tools in v18 of the AIR SDK appear to have been updated. If you are using that version you won't have to do any of the following!
Before you even start attempting to use an extension on Android you must update the android library build tools in your AIR SDK.
The one released with the current SDK isn't recent enough to use the latest features from the Google Play Library nor use some of the more recent SDK's.
If you have the Android SDK build tools installed then you can copy the
dx.jar file from
build-tools/x.x.x/lib/dx.jar over the same file in your AIR SDK located here:
You must replace the one in the AIR SDK with the one from the Android build tools and not the other way around.
If you don't have the build tools installed, then you can use the version located here: http://resources.airnativeextensions.com/android/dx.jar (version 20.0.0)
If you don't do this you will experience errors in your application.