I am having the exact same problem. I hope someone can help us. I have encountered this both when I try and run a single arcgrid, as well as when I try and run a batch of them. Here's an excerpt from my batch import file (no leading or following spaces in the batch file):
s:\msu\spatial\fragstats\arcgrids\feature_m0001,x,0,x,x,IDF_ARCGRID
s:\msu\spatial\fragstats\arcgrids\feature_m0002,x,0,x,x,IDF_ARCGRID
s:\msu\spatial\fragstats\arcgrids\feature_m0003,x,0,x,x,IDF_ARCGRID
s:\msu\spatial\fragstats\arcgrids\feature_m0004,x,0,x,x,IDF_ARCGRID
...but as I said, it also gives me the error when I attempt to run even one of the arcgrids.
I'm running ArcGIS 9.3 (ArcInfo license) and Fragstats 4.1, freshly downloaded and installed. I added the line to the PATH system variable directing it to the ArcGIS bin folder as well.