Why won't this compile?

I'm new to Java and I am trying to learn how to use ArrayList. I wrote
a short example, but it doesn't compile, so I found an example on the
web and it fails with the same error message.

Here's the example I downloaded:

import java.util.*;

public class ArrayListGenericDemo {
  public static void main(String[] args) {
    ArrayList<String> data = new ArrayList<String>();
    data.add("hello");
    data.add("goodbye");

    // data.add(new Date()); This won't compile!

    Iterator<String> it = data.iterator();
    while (it.hasNext()) {
      String s = it.next();
      System.out.println(s);
    }
  }
}

Heres the error:

D:\Data\java\parser\ArrayListGenericExample.java:5: '(' or '[' expected
    ArrayList<String> data = new ArrayList<String>();
                                          ^
1 error

I'm using j2sdk1.4.2_12 which I downloaded from sun a few days ago.

I tried an example from the book "Head First Java" and got the
identical error message.
My first hand-written example also go that message until I changed it
to declare a private instance variable as an ArrayList<String>

import java.util.*;

public class PatternLibrary {

    private ArrayList<String> pattArray;

    /**
    * Contructor
    */

    PatternLibrary() {
        pattArray = new ArrayList();
    }

   public ArrayList fetchPatterns( String[] matchWords ) {

         ...
        return pattArray;
    }
}

 and got this message:

D:\Data\java\parser\PatternLibrary.java:5: <identifier> expected
    private ArrayList<String> pattArray;
                     ^
1 error
What's going on here?

Any help would be deeply appreciated.

--gary