I recently set up Mathematica 9.0.1 on a new computer, along with x64 Eclipse Indigo with JRE 1.7, and the Wolfram Workbench 2 plug-in. Something is amiss, because when I try to do any sort of task involving Mathematica from inside Workbench, I get the same error message:
An internal error occurred during: "FrontEnd Job::Open Notebook". com.wolfram.jlink.NativeLink.MLOpenString(Ljava/lang/String;[Ljava/lang/String;)J
Otherwise, Mathematica works fine, as does the Eclipse install when used for other purposes (Java and Scala development).
This is a 64 bit Windows 7 machine.