Check the XML for any problems. And the size of the file can only be 16KB I think. So if you are adding large jar files, you have to use Download tag in the Startup package startup.xml file
Richard
Less than that. I had a 11 KB zip file that I encoded to base64 at 15KB and was unable to create the launch configuration. By removing a 3 KB jar file and reducing the zip to 7 KB, encoding to base64 gave me a 10KB file that worked.