Hudson is started with the following batch script:
@echo off
set HUDSON_HOME=C:\Work\hudson\hudsonHome
java -jar hudson.war --javaHome=C:\Program Files\Java\jdk1.6.0_18 --prefix=/hudson --httpPort=8080 --webroot=C:\Work\hudson\winstoneHome --logfile=C:\Work\hudson\hudson.log

running at the command prompt this command I experience the following error:
C:\Work\hudson>java -jar hudson-cli.jar -s http://localhost:8080/hudson dist-fork -l master date t
[distfork8999019989670479689.tmp] $ date /t
ERROR: Failed to execute a process
←[8mha:AAAAVx+LCAAAAAAAAABb85aBtbiIQSmjNKU4P08vOT+vOD8nVc8DzHWtSE4tKMnMz/PLL0m1W6NqK7pC2JmJgaGiiETYMzhAYpZIAARpDCAgBF2FTYYAAAAA==←[0mjava.io.IOException: Cannot run program "date" (in directory C:\Work\hudson\hudsonHome\distfork8999019989670479689.tmp"): CreateProcess error=2, The system cannot find the file specified
at java.lang.ProcessBuilder.start(Unknown Source)
at hudson.Proc$LocalProc.<init>(Proc.java:149)
at hudson.Proc$LocalProc.<init>(Proc.java:121)
at hudson.Launcher$LocalLauncher.launch(Launcher.java:633)
at hudson.Launcher$ProcStarter.start(Launcher.java:268)
at hudson.Launcher$ProcStarter.join(Launcher.java:275)
at hudson.plugins.distfork.DistForkCommand$1.run(DistForkCommand.java:147)
at hudson.plugins.distfork.DistForkTask$1.run(DistForkTask.java:70)
at hudson.model.ResourceController.execute(ResourceController.java:88)
at hudson.model.Executor.run(Executor.java:122)
Caused by: java.io.IOException: CreateProcess error=2, The system cannot find the file specified
at java.lang.ProcessImpl.create(Native Method)
at java.lang.ProcessImpl.<init>(Unknown Source)
at java.lang.ProcessImpl.start(Unknown Source)
... 10 more

whereas running the command directly at the DOS prompt no errors are generated:
C:\Work\hudson>date /t
14/03/2010

if I explicitely ask for a new Windows command interpreter instance all is fine:
C:\Work\hudson>java -jar hudson-cli.jar -s http://localhost:8080/hudson dist-fork -l master cmd /c date /t
[distfork58286187552956103.tmp] $ cmd /c date /t
14/03/2010

should dist-fork do this automagically?

I also noticed the prompt decoration does not really work in the DOS window.
It seems related to Groovy Shell:
C:\Work\hudson>java -jar hudson-cli.jar -s http://localhost:8080/hudson groovysh

←[32mGroovy Shell←[0m (1.6.0, JVM: 1.6.0_18)
Type '←[1mhelp←[0m' or '←[1m\h←[0m' for help.
-------------------------------------------------------------------------------
←[1mgroovy:←[0m000←[1m>←[0m quit

C:\Work\hudson>