Here is how I got it to work... I made a directory in the C drive called C:\LRFTools and another one called c:\eBooks (I put the books I wanted to convert here)
I also renamed the jar file to simply LRFTools.jar to make it easier on me
1. Start --> Run --> command
2. cd LRFTools
3. java -Xms200M -Xmx300M -jar LRFTools.jar convert c:\eBooks -EPUB
4. Whala!! LRFTools converted the books I had in the eBook directory to epub.
Hope this helps out a bit