Hello, I encountered this problem and came up with a solution that doesn't require doing anything to Java. All MapToolLauncher.exe seems to do is specify the memory and launch the jar. In the maptool folder itself are several batch (.bat) files, editable with notepad, etc, that have memory presets and allow you bypass MapToolLauncher.exe. The batch file is just a list of commands to run. The whole contents of "Launch MapTool-1G-Memory.bat" for example is:
javaw -Xmx1024M -Xss512K -jar maptool-1.3.b87.jar run
The problem with the existing batch files, on my machine at least, is that they call Java without including the full path, and so my machine can't find java as java is not in my machine's path setting.
One solution is to specify the full path of javaw.exe and your specific maptool jar (maptool-1.3.b87.jar in my case) Just make a new batch file, call it "Launch MapTool-1024M-Memory_fixed.bat" or whatever you like, edit in notepad and put:
"<location where java is installed on your machine>\javaw.exe" -Xmx<your desired memory max> -Xss<your desired memory min> -jar "<location of the maptool jar>\<your exact version filename>"
e.g., on my machine:
"C:\Program Files (x86)\Java\jre7\bin\javaw.exe" -Xmx1024M -Xss2048k -jar "D:\Users\R\Documents\Games\maptool\maptool-1.3.b87\maptool-1.3.b87.jar"
You can then put a shortcut to that batch file in your start menu or wherever you desire.