Yes, if any of your folder or file names contain blanks, you need to put those in quotes ("), otherwise the command is not read correctly. I made it a habit to include those all the time, so you never run into this problem.
You also need to set up a FEMDATA folder for your FEM files, and a RESULTS folder for your DAC/DAR files. FeFlow expects these default folder structure when running in batch mode as documented in the online help.
Once you got it figured out, it's pretty neat though and opens the door to a lot of cool applications, like PEST or automated Sensitivity Analyses (SensAn).
Good luck, Chris