+1  A: 

You don't mention the versions of the Scala command-line tools or the Scala IDE for Eclipse that you're using, but I'll stick my neck out and guess that the command line tools are 2.8.0 whereas the Eclipse tooling is 2.7.x or you have a 2.7.x scala-library .jar somewhere on your Eclipse projects classpath (maybe pulled in via a Maven dependency).

If that's the case then a pristine install of the Eclipse tooling for 2.8.0.final should resolve the issue for you. If it doesn't then you've probably found a bug in the SDT and you should report it here.

Miles Sabin
Yes, it's Scala 2.8 (break(Nil) is only supported in 2.8 as far as I know).I'm not sure it is a bug since the compiled binaries work fine in the command line: they just need to be launched with the "scala" command, not with "java" (as Eclipse does).
What kind of launch are you doing in Eclipse? Are you running as a Scala application with the Scala IDE for Eclipse?
Miles Sabin