That exception means that the JVM used to run the app is older that the JVM version in the class files. For example, trying to run classes compiled with JDK 6 with JVM 5. I suspect that you were not using the version of JVM that you thought.
By the way, it would have been better if you specified exactly what you did wrong in standalone.bat and exactly what you did to fix it - your last post is too vague to provide help to anyone else who has the same issue and comes across this discussion.
Thanks Peter for one of the posts you had recommended earlier on not setting the JAVA_HOME in the JBoss configuration file which I had overlooked in standalone.bat. I removed the extra JAVA_HOME & JAVA setting in the standalone.bat. I reverted to the original setting.
if "x%JAVA_HOME%" == "x" (
echo JAVA_HOME is not set. Unexpected results may occur.
echo Set JAVA_HOME to the directory of your local JDK to avoid this message.
) else (
BTW I dont have JRE or JDK 1.5 installed on the machine