Actually, the things you mention are trivial to port to a Windows batch file. While you certainly can use Windows ports of all Unix tools (or even use an emulation layer for even more fun) this is not hard to do:
~ for the user's home folder
The user's profile resides in the environment variable %USERPROFILE%, so the following should do it:
cd %USERPROFILE%\Documents\DropFolder
Iterating over a set of files
The for command is helpful here:
for %%i in (*.xml) do -Xss650K -Xms128m -Xmx2048m -jar ... %%i
Obviously you need to adapt the path to the JAR file, though.
And for has many more uses beyond this one, so take a look at help for as well.
basename
You need to do this either in a subroutine or a for loop, as the following syntax is specific to loop variables or parameters. It won't work with environment variables as is. You can get what basename is giving you by using %%~ni where %%i if the loop variable or %~n1 if %1 is the argument to a subroutine or batch file you have. So the following would probably do the same:
copy "%%~ni.xml" "%USERPROFILE%\Documents\ReadyForServer\%%~ni\"
The help on for has more information over those things near the end.