Guys, I had same issue. Here is the solutions...

What you need to do to isolate the problem is go to your SQL Server 2005 binn directory and rename your DTExec.exe to DTExec.exe_Backup. Try running same statement again if it works then you know what your problem is. Your problem is when you execute xp_cmdshell SQL automatically runs in SQL 2005 version instead of using DTExec.exe from SQL 2008 directory. If you don't have other BAT files running using DTExec.exe from 2005 then just leave it renamed and off you go. Otherwise you will have to make sure to convert all BAT file to start from SQL 2008 directories.

Hope this help...