Groovy and grails jdk issue

1. on your GGTS go to window
2. select java
3. select installed JREs
4. add-> Standard VM
5. jRE home select directory up to C:\Program Files\Java\jdk1.6.0_18
6. select jdk1.6.0_18 from installed JREs

I faced a similar issue (I am sure it is the exact issue) - Here are the steps to ensure it works correctly, I struggled with initially but this got it going.

1. Install JDK from http://www.java.com ,in a directory where there are NO SPACES in the path
2. Set JAVA_HOME to your JDK installation
3. Ensure %JAVA_HOME%\bin; is in your PATH variable.
4. On the command prompt run java -version, it should give you the path where JDK is installed
5. Install STS Springsource Tool suite.
6. Run your STS and create a new grails project and run it.

Let me know if that does not work.