I am also seeing the same Launch4j error and it is happening on two different machines. I noticed that I only see it the first time I launch the Arduino IDE. Subsequent launches of the IDE do not give an error until I reboot, then I get an error again.
I just loaded version 1.5.4-r2 of the IDE. It asks for java permissions at launch. It does not give an error. I did nothing else to the java environment. It work on an old machine running xp and a windows 7 machine.
Do you get the same results?