See also the ARQ Web site and ARQ FAQ.
The classpath is wrong. Include all the jar files in lib/.
You need to name each one.
See also "The CLASSPATH and Environment Variables"
The classpath is wrong. Include all the jar files in lib/ before running one of the command line applications.
This is almost always due to using the wrong version of the Xerces library. Jena and ARQ make use of XML schema support that changed at Xerces 2.6.0 and is not compatible with earlier versions. At the time of writing Jena ships with Xerces 2.6.1.
In some situations your runtime environment may be picking up an earlier version of Xerces from an "endorsed" directory. You will need to either disable use of that endorsed library or replace it by a more up to date version of Xerces. This appears to happen with some distributions of Tomcat 5.* and certain configurations of JDK 1.4.1.
Get queries working outside Joseki if they are problematic. When running inside a web application, there are many different parts all interacting so it can be hard to see which part is causing problems. Reduce the complexity by testing queries outside Joseki with the ARQ command line tools.
Then run with the standalone server (it's Jetty running with a single web application).
Then move into your web application environment once you know the various parts are working.