Not sure if it's worth anything, but I had a similar problem where I was getting a "java.sql.SQLException: No suitable driver found" error. I found this thread while researching a solution.
The way I ended up solving my problem was to forgo using java.sql.DriverManager to get a connection and instead built up an instance of org.hsqldb.jdbc.jdbcDataSource and used that.
The root cause of my problem (I believe) had to do with the classloader hierarchy and the fact that the JRE was running Java 5. Even though I could successfully load the jdbcDriver class, the classloader behind java.sql.DriverManager was higher up, to the point that it couldn't see the hsqldb.jar I needed.
Anyway, just putting this note here in case someone else stumbles by with a similar problem.