When specifying the --logfile option, you now get the following exception:

Exception in thread "main" java.lang.IllegalArgumentException: Unknown signal: ALRM
at sun.misc.Signal.<init>(Unknown Source)
at LogFileOutputStream.<init>(LogFileOutputStream.java:36)
at Main.main(Main.java:67)

commandline: java -jar hudson-1.291.war --logfile=c:\hudson\run.log

jdk: java version "1.6.0_11"
Java(TM) SE Runtime Environment (build 1.6.0_11-b03)
Java HotSpot(TM) Client VM (build 11.0-b16, mixed mode, sharing)

Remark that this issue also happens on win2K and I guess on all windows platforms!

Hudson version 1.275 has been verified to work any recent build doesn't work.
Judging by the changelog I guess this is linked to a patch in 1.277:
With the --logfile==/path/to/logfile option, Hudson now reacts SIGALRM and
reopen the log file. This makes Hudson behave nicely wrt log rotation.