While running encrypt.bat -e "C:\temp\key.txt"
I am getting the error below :
014-09-10 15:31:06,811 INFO [main] security.EncryptionUtil main (EncryptionUti l.java:289) - Invalid option format: ûe
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I guess you copy pasted command
encrypt.bat -e "C:\temp\key.txt" from some website.
It should be minus sign instead of dash, Can you try to type it and run it. You may find some helping steps here as well.
Install Java 32 Bit and try again.
It might be possible that your machine is 64-bit operating system and you have installed Java JDK 64-bit but Data loader requires 32-bit java to run these commands. Java should be installed in this location "C:\Program Files (x86)\Java".
Don't forget to change environment variable path also.