This week's book giveaway is in the General Computing forum. We're giving away four copies of Arduino in Action and have Martin Evans, Joshua Noble, and Jordan Hochenbaum on-line! See this thread for details.
You forgot to specify the full path to the log file. So the result is that log4j tries to write to Jetty's current working directory, rather than to its log directory. Which it doesn't have the authority to do, but that doesn't matter because it isn't what you want anyway.