For those who can't get it to work on Windows, try this:
1.) Right click on My Computer, and select Properties.
2.) Click on “Advanced system settings” and go to the “Advanced” tab.
3.) On the bottom, click the “Environment Variables” button. This will bring up the Environment Variables screen, you will see two sections, User Variables (at the top), and System Variables (at the bottom).
4.) Add a system variable with the name JDK_HOME, and the value equal to the path to your JDK install.
Step 4 might differ based on how your system is setup, but as an example, here are the settings that worked for us:
Variable name: JDK_HOME
Variable Value: c:\Program Files\Java\jdk1.7.0_21\
Credit goes to Jonathan Nalewajek of CypressNorth http://www.cypressnorth.com/blog/mobile-application-development/android-studio-not-working-in-windows-7-or-8-fixed/