Did you try this on the latest of the 0.8 branch? What OS did you run it on? When I ran it, it works and gives me the following. This is actually a required step. Otherwise, the scripts under bin won't work.
[info] Loading project definition from /Users/jrao/intellij_workspace/kafka_git/project
[info] Set current project to Kafka (in build file:/Users/jrao/intellij_workspace/kafka_git/)
[info] Compiling 2 Scala sources to /Users/jrao/intellij_workspace/kafka_git/core/target/scala-2.8.0/classes...
[info] Including snappy-java-188.8.131.52.jar
[info] Including zookeeper-3.3.4.jar
[info] Including metrics-core-2.2.0.jar
[info] Including zkclient-0.2.jar
[info] Including metrics-annotation-2.2.0.jar
[info] Including log4j-1.2.15.jar
[info] Including scala-compiler.jar
[info] Including slf4j-api-1.7.2.jar
[info] Including slf4j-simple-1.6.4.jar
[info] Including jopt-simple-3.2.jar
[info] Including scala-library.jar
[warn] Merging 'META-INF/NOTICE' with strategy 'rename'
[warn] Merging 'org/xerial/snappy/native/README' with strategy 'rename'
[warn] Merging 'META-INF/maven/org.xerial.snappy/snappy-java/LICENSE' with strategy 'rename'
[warn] Merging 'LICENSE.txt' with strategy 'rename'
[warn] Merging 'META-INF/LICENSE' with strategy 'rename'
[warn] Merging 'META-INF/MANIFEST.MF' with strategy 'discard'
[warn] Strategy 'discard' was applied to a file
[warn] Strategy 'rename' was applied to 5 files
[success] Total time: 43 s, completed May 21, 2013 9:32:30 AM