Resolution:
The full stack which shows up is:

*** Warning: Invalid Predicate
   Severity: WARNING
   Facility: CLIENT
   Code: 1513


Warning: Invalid Predicate
        at com.tibco.workflow.icjava.remote.WfTaskRemImpl.setIterateCondition(Wf
TaskRemImpl.java:1364)
        at com.tibco.workflow.icjava.remote.WfTaskRemImpl.setBranchTask(WfTaskRe
mImpl.java:1390)
        at com.tibco.workflow.icjava.WfTaskImpl.setBranchTask(WfTaskImpl.java:17
18)
        at IcJavaExample.main(IcJavaExample.java:119).

The key to note is that this is a warning and not an error.  The branch task is correctly set.  What needs to be done is write a try-catch block around the call to decision.setBranchTask("TASK1").  It should look like:

try {
    decision.setBranchTask("TASK1");
    }
catch (WfException ice) {
    if (ice.equals(WfException.warningInvalidPredicate ))    
        ; /* Do nothing this is warning only. */
    else{
    
        /* Call error handling and print stack trace.  */
    }
}

A full example program is attached.