The error says that it cannot found your DrawRect in the classpath. Basically adding a "." to the classpath solve the problem as you execute the class from inside the same folder. So try to update the classpath to:
set CLASSPATH=C:\Program Files\Java\jdk1.6.0_03\bin\element.zip;.
or you can define the classpath when you execute the java command with -cp or -classpath option set.