im running the runcube.bat in the demo directory
Well that's why you're having the trouble, you should've said that in your first post. Runcube.bat is manually specifying the classpath location for all the libraries. You don't want this if you're putting your classes into the java.ext.dirs and java.library.path.
1) Put the native windows stuff (.dll and the like) in java.library.path
2) put non-native libraries including xith.jar, jogl.jar, and vecmath.jar into java.ext.dirs
3) open up Runcube.bat and look at what's written there. As you can see it's manually specifying the locations of all the libraries. What you just want, since your libraries are loaded in by default since they're in those directories, is simply the last part that says: com.xith3d.test.CubeTest
4) simply type in the console 'java com.xith3d.test.CubeTest'
This should work if all your libraries are in the correct location. Also, if you want to use Xith, then go to the download directory
and get the latest CVS that's been built there (or download and compile the CVS yourself from xith3d.dev.java.net).
And last but not least, read all the FAQs on the xith homepage, and go here
and read the getting started thing, read the interesting threads, etc.