This error seems to occur frequently. Unfortunately, I haven't been able to reproduce this error on my system.
Have you already checked the potential error sources mentioned above?
- Are you sure that you have referenced ArcObjects like it is describe at http://52north.org/communities/geoprocessing/osm2nds/installation.html?
- What's the path to arcobjects.jar on your computer? Is it the same as in your batch file?
- Which ArcGIS version and licence do you have?
- Have you already tried to use the JDK instead of the JRE?