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Anyone can throw me some pointers on how to use bibtex2xml as a lib in my java app?
You need to provide some kind of documentation =).
Include the net.sourceforge.texlipse package (with subpackages) in your application. Use the class net.sourceforge.texlipse.bibparser.Bib2JDomParser to get a JDOM XML tree from a Reader opened on a BibTeX file . Use a javax.xml.transform.Transformer that understands JDOMSource to serialize the JDOM or to convert it to W3C DOM or SAX.
I would also suggest that you have a look at net.sourceforge.bibtexml.TeXLipseParser and its superclass.
Btw. if you're a java programmer it should not have been too hard to deduce this information from the BibTeXConverter source and/or javadoc.