Have been using the Sony Ericsson SDK for 5 years now, and to debug is simply hitting the 'Debug' button in eclipse. Doing that will start the emulator and auto start your application by running startApp()
How do you debug with Nokia SDK 2.0?
When I hit the debug button, an emulator pops up (the one that comes default with the offline Nokia SDK 2.0 version) and I get the date and time screen. Correcting the details I get the grid screen. Going into files or games shows an empty folder.