Weird SQLCMD issue

I've got a server that runs the open source Job Scheduler to execute scheduled tasks, and I encountered a strange problem with SQLCMD today. Basically, a very simple script fails to execute:

2009-02-02 13:52:01.224 [info] C:\Program Files\scheduler>sqlcmd -S TestServer1 -E -i "c:\temp\test.sql"
2009-02-02 13:52:01.224 [info] SCHEDULER-915 Process event
2009-02-02 13:52:01.224 [ERROR] SCHEDULER-280 Process terminated with exit code 1 (0x1)

This script executes without a problem on the command line, and

echo %errorlevel%

after its execution returns 0. I thought this might be an authentication issue, but switching to SQL authentication and entering the credentials explicitly on the command line produced the same result.

The strangest part of the whole thing is that switching from SQLCMD to OSQL makes the script work fine. I'd rather use SQLCMD, but I don't have time to investigate the minute difference in output that's causing JS to barf on it, so I guess it's back to the old reliable OSQL. At least until it's no longer supported.