These direct steps (using the openjdk, not the Sun one) are confirmed to work…
Below, the following are our (typical) values :

MY_ANDROID_SDK : /path-to-android-sdk-installation-root/android-sdk-linux_86
MY_TITANIUM_DEVELOPER_DIR : /path-to-titanium-developer-installation-root/Titanium Developer-1.2.1
MY_TITANIUM_FILES_DIR : /path-to-my-home-directory/.titanium
MY_TITANIUM_SDK : /any-suitable-directory/

Note that MY_TITANIUM_FILES_DIR is the default created/used by the Titanium Developer program, which one runs from MY_TITANIUM_DEVELOPER_DIR using ./Titanium Developer
Check that the build tools are [...]