Yes, I've heard of this problem before. Strangely, it is working correctly here. When the first user reported this problem, I uninstalled the Android SDK here completely and did a fresh reinstall but I could install API level 10 just fine. I didn't get the "not available for Windows" error. But there definitely seems to be a problem on some systems (just check Google) but so far it hasn't been resolved yet. Someone should probably file a bug report at
http://b.android.com/Because of these availability problems of older APIs I'm planning to bump to a newer API for the next update of the APK Compiler but this of course means that you'll need at least Android 4.0 for APKs compiled with the APK Compiler.
Until then, you should try the following to get it to work:
1) Do a fresh reinstall of the Android SDK and make sure you let it install *all* the packages which are selected by default. Do not unselect any packages that are selected by default!
2) Close SDK Manager
3) Download the following archive
http://www.airsoftsoftwair.de/binary/android-10.zip and unzip it manually into the "platforms" directory of your Android SDK installation. The archive contains the API level 10.
4) Restart SDK Manager
5) Install API10 Google APIs
Then it should work (hopefully...)