Hey PrettyLazy, you want to make sure the batch file is located in the same folder as the craftbukkit.jar. You also want to make sure that you rename the Craftbukkit you downloaded to Craftbukkit or in the batch file change it to the snapshot name.
I have the same problem trying to get bukkit going. According to bukkit's instructions you are supposed to add the java path to Windows 8 so that you can run that batch file. I added it to the path, but when I run the batch file it give the same error PrettyLazy is reporting.
CorruptedHelix said "I know there's a way to specify a direct path to the java.exe in the .bat". Does anyone know how that is done? Being able to run that batch file will most likely solve everything.
Okay, I solved the problem and I came back here to let PrettyLazy and anyone else know how I did - hope this works for you too. You have to successfully get the Java.exe directory into your windows path.
You have to go to My Computer and right click to get properties, then choose Advanced System Settings. At the bottom of the window that pops up click Environment Variables. Find the variable "path" and highlight it select Edit.
Here is where you are supposed to put a semi-colon at the end and add your path, which for my version of java and Windows 8 was: C:\Program Fiels (x86)\Java\jre7\bin . However, this wasn't working. I finally tried adding that at the very beginning as the first path defined and put a semi-colon after it, and it worked. For whatever reason it wasn't accepting the path addition at the end.
Then I ran the batch file for Bukkit, no problem. Good luck to anyone else having this issue. It was very frustrating because there is apparently no solution posted anywhere that I can find.