Default implementations of the classloader cannot load from a jar-within-a-jar: in order to do so, the entire 'sub-jar' would have to be loaded into memory, which defeats the random-access benefits of the jar format (reference pending - I'll make an edit once I find the documentation supporting this).
I recommend using a program such as JarSplice to bundle everything for you into one clean executable jar.
Edit: Couldn't find the source reference, but here's an un-resolved RFE off the Sun website describing this exact 'problem': https://bugs.java.com/bugdatabase/view_bug?bug_id=4648386
Also, you could 'test' that your program works by placing the library jar files in a \lib
sub-directory of your classes
directory, then running from the command line. In other words, with the following directory structure:
classes/org/sai/com/DerbyDemo.class
classes/org/sai/com/OtherClassFiles.class
classes/lib/derby.jar
classes/lib/derbyclient.jar
From the command line, navigate to the above-mentioned 'classes' directory, and type:
java -cp .:lib/* org.sai.com.DerbyDemo