Been trying different ways to get the CFCOMPILE utlity to work for about a two months now. Finally, with some help of a more Java-knowledgeable friend, I got it working in JBoss. The key is adding the proper jar files to the J2EEJAR property of the batch file. A fully qualified path to each of these libraries must be added to the J2EEJAR variable.

- server\{instance}\lib\jboss-j2ee.jar
- server\{instance}\lib\javax.servlet.jar
- lib\endorsed\xercesImpl.jar
- server\{instance}\lib\javax.servlet.jsp.jar
- lib\endorsed\xalan.jar

Here’s an example of what it looks like when in proper format.
set J2EEJAR = \jboss\server\orbwave\lib\jboss-j2ee.jar; \jboss\server\orbwave\lib\javax.servlet.jar; \jboss\lib\endorsed\xercesImpl.jar; \jboss\server\orbwave\lib\javax.servlet.jsp.jar; \jboss\lib\endorsed\xalan.jar