I think that based on your error, you are using the staryDynamoOnJBoss command (or runAssembler), and that is where you get the error, not when you are starting JBoss, correct?
In that case, I suspect that you have a 1.4 JDK in your PATH or you have the JAVA_VM variable pointing to a 1.4 JDK.
In the command prompt where you run startDynamoOnJBoss or runAssembler, set the JAVA_VM variable to point to your 1.5 JDK first and then see if you still encounter problems. For example, in Windows:
set JAVA_VM=c:\jdk1.5.0_11\bin\java.exe
ATG 2007.1 was compiled and only works with JDK 1.5.
- George