I found an excellent post that answered my question. I am pasting it here for others who have the same confusion regarding accessing the sqlite database content in our system:
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
The filesystem of the emulator doesn't map to a directory on your hard drive. The emulator's disk image is stored as an image file, which you can manage through either Eclipse (look for the G1-looking icon in the toolbar), or through the emulator binary itself (run "emulator -help" for a description of options).
You're best off using adb from the command line to jack into a running emulator. If you can get the specific directory and filename, you can do an "adb pull" to get the database file off of the emulator and onto your regular hard drive (this applies to a real device too, even if you have non-root permissions and "ls" isn't showing you anything).
You have to be on the DDMS perspective on your Eclipse IDE (Windows > Open Perspective > Other > DDMS), and, the most important, YOUR APPLICATION MUST BE RUNNING SO YOU CAN SEE THE HIERARCHY OF FOLDERS AND FILES. Then you will follow the path data > data > your-package-name > databases > your-database-file.
The databases are stored as SQLite files in /data/data/PACKAGE/databases/DATABASEFILE where:
PACKAGE is the package declared in the AndroidManifest.xml (tag "manifest", attribute "package")
DATABASEFILE is the name passed when you call the SQLiteOpenHelper constructor as explained here:
Data Storage | Android Developers
You can see (copy from/to filesystem) the database file in the emulator selecting DDMS perspective, in the File Explorer tab.
you can pull /data/data/package_name/databases/databasefile.db from device to your harddisk using DDMS. Then you can use SQLite3 to open and work on that databasefile.db
You can use any Graphic SQLite management tool to work with the databasefile.db on your PC. Create tables, insert, update, delete... After you have done just upload the databasefile.db to device using DDMS again.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
I tried this method and it works great. The only annoying part is that everytime you run your application and generate/remove data from the database, you have to take the latest .db file from DDMS and move it to your filesystem. I used a graphical client called SQLite Database Browser to browse this database.
thanks