Choose a path on your local hard disk e.g. "C:\Decompiler\jad" and put jad.exe at this location
Then change environment variable "Path" to include the above path for jad.exe
Now its turn for JadClipse
put JAR file for JadClipse into eclipse's plugin directory e.g. "C:\eclipse\plugins"
Now restart Eclipse
Go to Eclipse -> Window -> Preferences -> Java ->JadClipse....
Give path to decompiler as "C:\Decompiler\jad\jad.exe"
Decompilation is all set using Eclipse plugin JadClipse