Hi Raj,
I also faced the same issue. Make sure few things:
1.Make sure smp server is up and running.
2 . mention ip address instead of host name in eclipse settings
3.most importantly, install latest JDK version 1.7.0_51 or JRE 7
4. Set environment variables properly.
Under system variable, create a new variable JAVA_HOME: JDK or JRE installation path
CLASS_PATH: %JAVA_HOME%bin
restart eclipse and then check.
Let us know if you face any issues.
Rgrds,
JK