Then make sure that you have placed jce1_2-do.jar in the CLASSPATH. You can decompress the jar, but then it expands into multiple paths and you have more configuration work to do. So just add the jar file to the CLASSPATH. The CLASSPATH can be changed in System/Environment tab in the Control Panel.
If you need a COM dll then use Visual J++ to put a COM wrapper around them. After you have created a COM object you can use an SQL Server stored procedure or an ASP page to invoke it.
Enciphering and ciphering data depend on having a key. If you change the key then all your passwords will not work. Also if someone can get your key they can get all your passwords. So the table or file holding the key must be guarded with extreme care.
The connection is made using the ODBC-JDBC Bridge, since this is the most available driver. However, for any real java database work you will need a commercial JDBC driver such as WebLogic.
Please make sure that your ODBC connection has the following unchecked: "Use ANSI nulls,padding and warning". If it is checked then you will have a string with nulls appended to the size of the VARCHAR.
The passwordSecure.java creates a command line program with a sampler of the methods available. Normally the calling program would have a web interface, but it is simpler to present it this way.