If you are using Java 5 (aka Java 1.5) then the compiler built into JAS will not work. Instead you must use an external Java compiler. To fix this:

1. Start JAS
2. Choose View, Preferences
3. In the preferences tree select Java/Compiler
4. On the Java Compiler Preferences page click the Browse... button next to the compiler option. Use the file browser to locate javac.exe. Normally this would be somewhere like c:\Program Files\Java\jdk1.5.0\bin\javac.exe

After this the compiler should work.