It looks like there is a Java directory on your path (twice, actually). Try to have a look at the directory C:\Program Files\Java\jdk1.6.0_21\bin - is it there? Does it contain java.exe and other JDK tools?
I don't have any experience with Eclipse, but I'd say you can add the -vm option to eclipse.ini when it doesn't exist yet. Googling eclipse.ini vm brings up some pages which seem useful in this context.