I got the same error before.
You are missing the "cl.exe" command line executable, which is provided with MS C++ 6.0 in my case, maybe other C-Compilers may also have it.
The "NoClassDefFoundError" appears when your classpath does not point to the directory where "MakePalmApp" is.
Following is a Batch I use for compiling, preverifying and making a .prc file:
Remember to set your paths appropriately!
javac -d tmp -classpath %allclasspath% *.java
D:\j2me_cldc\bin\preverify -d classes -classpath %j2meclasspath% tmp
java -classpath %allclasspath% palm.database.MakePalmApp -v -networking -bootclasspath %j2meclasspath% -classpath classes <YourProject.MainClass>