There should really be no need to add the minecraft.jar to the classpath, just be sure be in the same folder as the jar when you try to launch it?

Yeah, sorry about that earlier post about the jar-files. But on that same download-page there's also the server download instruction on the bottom of the page.

You can unzip that jar in a similar fasion as the earlier, but it will complain if you start it with too little RAM reserved for the JVM.

Unfortunately it doesn't seem that there is any easy way to get Java 1.6 installed on the ATV2 and the minecraft server instructions does mention that as an requirement:
http://www.minecraftwiki.net/wiki/Tu...ng_up_a_server

This is the output in the 2 scenarios (JAR & extracted folderstrcture with classes)
(run in same folder as minecraft_server.jar)
$ java -Xmx1024M -Xms1024M -jar minecraft_server.jar nogui
2011-02-23 15:44:36 [INFO] Starting minecraft server version Beta 1.3
2011-02-23 15:44:36 [INFO] Loading properties
2011-02-23 15:44:36 [INFO] Starting Minecraft server on *:25565
2011-02-23 15:44:36 [INFO] Preparing level "world"
2011-02-23 15:44:37 [INFO] Preparing start region
2011-02-23 15:44:37 [INFO] Done (561081715ns)! For help, type "help" or "?"

or if you extract the minecraft_server.jar to a folder-structure:
$ cd minecraft_server/
$ java -Xmx1024M -Xms1024M net.minecraft.server.MinecraftServer nogui
2011-02-23 15:45:47 [INFO] Starting minecraft server version Beta 1.3
2011-02-23 15:45:47 [INFO] Loading properties
2011-02-23 15:45:47 [INFO] Starting Minecraft server on *:25565
2011-02-23 15:45:47 [INFO] Preparing level "world"
2011-02-23 15:45:47 [INFO] Preparing start region
2011-02-23 15:45:47 [INFO] Done (571725660ns)! For help, type "help" or "?"

Also, trying to run the server with lower memory requirement yields a warning (but not an error) at startup:

$ java -Xmx128M -Xms128M net.minecraft.server.MinecraftServer nogui
2011-02-23 15:47:21 [INFO] Starting minecraft server version Beta 1.3
2011-02-23 15:47:21 [WARNING] **** NOT ENOUGH RAM!
2011-02-23 15:47:21 [WARNING] To start the server with more ram, launch it as "java -Xmx1024M -Xms1024M -jar minecraft_server.jar"
2011-02-23 15:47:21 [INFO] Loading properties
2011-02-23 15:47:21 [INFO] Starting Minecraft server on *:25565
2011-02-23 15:47:21 [INFO] Preparing level "world"
2011-02-23 15:47:21 [INFO] Preparing start region
2011-02-23 15:47:22 [INFO] Done (578852912ns)! For help, type "help" or "?"

I recognize that output from my server running on a windows 7 PC. I guess it's the old version of java holding me back. So, how to upgrade JavaVM on appletv2 ...
Thanks for your help so far, Carlington!

Ok,

I tried this on my local ATV2 with the following output using the 2 methods:
Apple-TV $ unzip minecraft_server.jar -d minecraft
Apple-TV $ cd minecraft
Apple-TV:minecraft $ java -Xmx128M -Xms128M net.minecraft.server.MinecraftServer nogui
2011-02-23 10:30:03 [INFO] Starting minecraft server version Beta 1.3
2011-02-23 10:30:03 [WARNING] **** NOT ENOUGH RAM!
2011-02-23 10:30:03 [WARNING] To start the server with more ram, launch it as "java -Xmx1024M -Xms1024M -jar minecraft_server.jar"
2011-02-23 10:30:03 [INFO] Loading properties
2011-02-23 10:30:03 [WARNING] server.properties does not exist
2011-02-23 10:30:03 [INFO] Generating new properties file
2011-02-23 10:30:03 [INFO] Starting Minecraft server on *:25565
java.lang.NoSuchMethodError: setPerformancePreferences
at cc.<init>(SourceFile:25)
at net.minecraft.server.MinecraftServer.d(SourceFile: 112)
at net.minecraft.server.MinecraftServer.run(SourceFil e:237)
at bc.run(SourceFile:366)
2011-02-23 10:30:03 [SEVERE] Unexpected exception
java.lang.NoSuchMethodError: setPerformancePreferences
at cc.<init>(SourceFile:25)
at net.minecraft.server.MinecraftServer.d(SourceFile: 112)
at net.minecraft.server.MinecraftServer.run(SourceFil e:237)
at bc.run(SourceFile:366)

Apple-TV:minecraft $ cd ..
Apple-TV: $ java -Xmx128M -Xms128M -jar minecraft_server.jar nogui
java.lang.NoClassDefFoundError: cm
at java.lang.VMClass.getDeclaredMethods(Native Method)
at java.lang.Class.getDeclaredMethods(Class.java:536)
at java.lang.Class.internalGetMethod(Class.java:722)
at java.lang.Class.getMethod(Class.java:710)
at jamvm.java.lang.JarLauncher.main(JarLauncher.java: 47)
Caused by: java.lang.ClassNotFoundException: cm not found in java.lang.ClassLoader$1{urls=[file:/Downloads/minecraft_server.jar], parent=null}
at java.net.URLClassLoader.findClass(URLClassLoader.j ava:626)
at java.lang.ClassLoader.loadClass(ClassLoader.java:3 41)
at java.lang.ClassLoader$1.loadClass(ClassLoader.java :1112)
at java.lang.ClassLoader.loadClass(ClassLoader.java:2 93)
at java.lang.VMClass.getDeclaredMethods(Native Method)
...4 more
Caused by: java.util.zip.ZipException: Code lengths don't add up properly.
at java.util.zip.InflaterInputStream.read(InflaterInp utStream.java:200)
at java.io.FilterInputStream.read(FilterInputStream.j ava:189)
at java.util.jar.JarFile$EntryInputStream.read(JarFil e.java:912)
at java.net.URLClassLoader.findClass(URLClassLoader.j ava:548)
...8 more

So as you can see by extracting the classes it got at least a bit further before crashing fatally.
My Java VM:

$ java -version
java version "1.5.0"
JamVM version 1.5.1
Copyright (C) 2003-2008 Robert Lougher <rob@lougher.org.uk>

This program is free software; you can redistribute it and/or
modify it under the terms of the GNU General Public License
as published by the Free Software Foundation; either version 2,
or (at your option) any later version.

This program is distributed in the hope that it will be useful,
but WITHOUT ANY WARRANTY; without even the implied warranty of
MERCHANTABILITY or FITNESS FOR A PARTICULAR PURPOSE. See the
GNU General Public License for more details.

Build information:

Execution Engine: direct-threaded interpreter with stack-caching
Compiled with: gcc 4.2.1 (Based on Apple Inc. build 5555)

Boot Library Path: /usr/lib/classpath
Boot Class Path: /usr/share/jamvm/classes.zip:/usr/share/classpath/glibj.zip

That looks to be the identical output that I am getting as well. A Minecraft update was recently released (beta 1.3_01) which supposedly removed dependency on java 1.6, as the the game was built for java 1.5 compatibility with a couple exceptions. This is the client, however; I wonder if the same could be done with the server? I downloaded the newest version and tried again, but alas the same screen as you just posted. Perhaps this will be fixed soon by the dev team itself, or maybe that's too simple of an answer.

I made a new post on the minecraft forum as well, as I probably should have done long ago:
Minecraft server on AppleTV2 (Java 1.5) - Minecraft Forums

I tried to start minecraft server on iPad:
cd minecraft_server
java -Xmx128M -Xms128M net.minecraft.server.MincraftServer nogui
but got:
java.lang.NoSuchMethodError: setPerformancePreferences
at cc.<init>(SourceFile:25)
at net.minecraft.server.MinecraftServer.d(SourceFile: 112)
at net.minecraft.server.MinecraftServer.run(SourceFil e:237)
at bc.run(SourceFile:366)
2011-03-05 15:05:04 [SEVERE] Unexpected exception
java.lang.NoSuchMethodError: setPerformancePreferences
at cc.<init>(SourceFile:25)
at net.minecraft.server.MinecraftServer.d(SourceFile: 112)
at net.minecraft.server.MinecraftServer.run(SourceFil e:237)
at bc.run(SourceFile:366)
Any suggestions?

Looks pretty similar to what we have been getting on AppleTV's iOS. it probably either does not have enough ram, or some problems with Java. I wish I was more advanced and could do something about the java side. I thin the ram on these devices is tiny, but it should still be enough to at least get a server open...

I just hope someone will be interested in this topic still to give it more tries. Like I mentioned earlier, the current versions of minecraft shouldn't depend on java 1.6 at all now. That should eliminate some of the problems. Anyone with enough knowledge with java want to take another stab at this? I would love to be able to run a server for 3 people on my always-on appletv

This is my most recent progress:
I unzipped the jar file first.
The caveat is that once the server is running, I can connect to it in minecraft client. Instead of the waiting for server and then a time out, it moves to "Logging in". However, after a time out, it drops out. The server appears to be running on the AppleTV2, but it cannot load everything to actually get the whole program up and running. I can type commands to the minecraft server from the terminal window, but when I type list to list the players, it says "stopping server" and then the server quits.
Weird huh? Anyone have ideas for these seemingly last few bugs in the way of running a server all the time on my AppleTV2?

Apple-TV:/Applications/minecraft/mcserver root# java -Xmx128M -Xms128M net.minecraft.server.MinecraftServer nogui
[Lmp;@69aa18
146 recipes
[Lmp;@69aa18
16 achievements
2011-05-19 03:01:17 [INFO] Starting minecraft server version Beta 1.5_02
2011-05-19 03:01:17 [WARNING] **** NOT ENOUGH RAM!
2011-05-19 03:01:17 [WARNING] To start the server with more ram, launch it as "java -Xmx1024M -Xms1024M -jar minecraft_server.jar"
2011-05-19 03:01:17 [INFO] Loading properties
2011-05-19 03:01:17 [INFO] Starting Minecraft server on *:25565
java.lang.NoSuchMethodError: setPerformancePreferences
at cl.<init>(SourceFile:25)
at net.minecraft.server.MinecraftServer.c(SourceFile: 129)
at net.minecraft.server.MinecraftServer.run(SourceFil e:263)
at bj.run(SourceFile:394)
2011-05-19 03:01:17 [SEVERE] Unexpected exception
java.lang.NoSuchMethodError: setPerformancePreferences
at cl.<init>(SourceFile:25)
at net.minecraft.server.MinecraftServer.c(SourceFile: 129)
at net.minecraft.server.MinecraftServer.run(SourceFil e:263)
at bj.run(SourceFile:394)

you should give it up. Even when you'll get it running you wont be able to connect. 256MB Ram (max - dont forget the OS uses some ram for itself) will crash the server the moment it creates the initial map. Even if you use a pre-generated map it will crash wenn you connect to it.

It's just too few ram. We tested it, you need at least around 400MB ram exclusive for the game to make it run - but very buggy, laggy and it crashed all the time.

The minecraft-server is one of the worst written programs ive seen in my life, so just forget to run it in an embed enviroment.