Here's the relevant part of the log file:
About to attempt to load BIOSes...
VJ: BIOS is not available...
VJ: CD BIOS is not available...
Initializing video subsystem...
Initializing GUI subsystem...
About to start GUI...
GUI: Inside GUIMain...
GUI: Resetting Jaguar...
--> GPU stats were reset!
Jaguar: 68K reset. PC=90B03D00 SP=78013D00
GUI: Clearing BG save...
VJ: Loading "c:\vj\roms\atari karts (1995).j64"...OK (4194304 bytes)
CRC: E28756DE
EEPROM: Loaded from E28756DE.eep
GUI: Bypassing GUI since ROM passed in on command line...
--> GPU stats were reset!
Jaguar: 68K reset. PC=90B03D00 SP=78013D00
M68K encountered an illegal instruction at 00000000!!!
It's not finding the BIOS file, but it
is finding the EEPROM files. Two things you might want to check--whether or not your file is actually called jagboot.rom and what the working directory is when you run VJ (say, from a shortcut).
You have uncovered an honest-to-God bug, though--if the BIOS is unavailable, it shouldn't crash. I should be able to fix that one shortly.