Configuration worked with Eclipse Mars 4.5 version.
1) Install Eclipse Mars 4.5 from https://eclipse.org/downloads/packages/eclipse-ide-java-ee-developers/mars2 This comes with Tern and embedded Node.js server
2) Install AngularJS Eclipse plugin from Eclipse Marketplace
3) Configure node.js server to the embedded nodejs server within Eclipse (found in the eclipse plugins folder) at Windows-> Preferences -> JavaScript -> Tern -> Server -> node.js. No extra configurations are required.
4) Test configuration in a html or javascript file. https://github.com/angelozerr/angularjs-eclipse