Success! Looks like we've fixed this one. According to our records the fix was applied for
Ok, I removed all JREs and JDKs and just installed the latest JDK (1.7.0_09) and added the Java "bin" folder to my PATH variable. I restarted the cmd window and I no longer get the JAVA_HOME error, so I think I am making progress now. However, I got a different error ... "Debug Certificate expired on 4/4/12 10:08 AM". I am going to research this issue now.
Final Update ... I successfully created the apk. Thanks for the help, gentlemen!