Working with the Android emulator isn't as nice as working with a VMware virtual machine. You can't simply copy text from your notepad and paste it into the Android emulator.
A nice way of getting around it is using the SMS functionality accessible via telnet.
Assuming your emulator is running on port 5554, open up a command prompt window:
telnet localhost 5554
sms send +12345 your message begins here
For the phone number, you can just enter anything in. An error will show up telling you if anything is wrong.