How does one run that command? in Windows?
Just open the DOS/Command Prompt box and type that in at the arduino folder directory?
that's pretty much it. you may need to specify full path name to the program and to the conf file.
you can turn on verbose upload on arduino IDE to see the exact command arduino makes, and you can do the same in a dos prompt.
like if I upload the blink sketch, this is what arduino does
E:\arduino-1.0\hardware/tools/avr/bin/avrdude -CE:\arduino-1.0\hardware/tools/avr/etc/avrdude.conf -v -v -v -v -patmega328p -carduino -P\\.\COM1 -b115200 -D -Uflash:w:C:\TEMP\build2046637769768951399.tmp\Blink.cpp.hex:i
or modify as needed, say to write eeprom. you will need -cstk500v1 instead of -carduino.