Make sure that you have all the necessary executables in: C:\Program Files\Java\jdk1.7.0_21
You can test that Java is found by executing java -version
from CMD.
You also need to add the JRE to your Path so that the programs javaw etc. are found.
You can test that Javaw is found by executing javaw
from CMD.
I have not gotten calabash to work on Ruby 2.0 however 1.8.7 works for me.
(Ruby 2.0 gives me a gherkin error)
Again you can test that Ruby is found by executing ruby -version
from CMD.
Other than this, your paths seems correct