I believe I have received this or a similar error when trying to run dbsetup.bat across the network. Did you try copying the database folder to the local PC and running it from there? You may also have an issue if you are trying to run it from within a compressed zip file.
Yes I did its on the desktop and I tried working in C:\ drive also. Im running vista home edition SP2 with updated jre and using ADMIN accnt. Im about to format the pc if this not serve me good. It works in other machine but a terrible problem only in this laptop.
I know this forum was from awhile ago, but people who have the same error will probably still come across it. I know I did when I was looking for a solution. Finally figured out it was a matter of changing windows settings. There is a blog about it here. http://www.cassellconsulting.com/consulting/java-error-in-primavera-p6-install.html