I have recently used Java Service Wrapper from Tanukisoftware and it works perfectly on windows 7. Also the tool is pretty handy as it provides pretty extensive integration mechanism from simple jar execution to shutdown hook functionality as well.
For normal use, you can use their Community License which falls under GPL v2.0, however keep in mind if your intended use is on server, you might have to double check licensing options.
Also windows resource kit includes a tool called servany.exe which i successfully used on Windows Xp to start a jar file as a service by lanuching java.exe with arguments to my jar file, however since windows 7 this somehow does not work.
You might want to do a little research since i have read some forums about people still affirming that it works.
