You will have to create a new device. On the AVD Manager, switch to the Device Definitions tab and press New Device (or start by selecting one of the devices which is close to what you want and pressing Clone). Then set it up with the following parameters:
* Screen Size: 2.7"
* Resolution: 480x640
* Size: Small
* Density: hdpi
Once you save the device
you should be able to go to the Android Virtual Devices tab, create a new AVD and select the one you made in the Device: drop-down.
Note, I am using the latest SDK, options and names may differ in an older version.