Below you will find a [*** very rough ***] modified version of your code
that captures your command's output and both appends it to a StringBuffer,
and outputs it to a file [both shown for illustration purposes - choose
whichever method you wish]. You might also want to do some more reading on
'Process' for other command-line options, and process control features.

May I point out that unless this is purely a Java learning exercise, or you
later intend adding other Java-specific features [e.g. GUI-interface etc]
that Java is not really the ideal tool for this type of task [in fact, it
would probably be overkill, and much of Java's 'power' would be wasted].
You'd probably be better off using a scripting facility - the Win32 batch
language [on NT, Win2K and XP - issue a 'for/?' and 'set/?' at the command
line for syntax help] is actually quite well suited to this type of task, as
are third party tools such as sed / grep and gawk.

I hope this helps.

Anthony Borla

// ------------------------------------------
import java.io.*;

public class TraceIP
{
 public static void main(String[] args)
 {
   TraceIP.traceIP("in.txt", "out.txt");
 }

 public static void traceIP(String fileName, String outFileName)
 {
   if ((fileName == null) || (fileName == ""))
     throw new IllegalArgumentException();

   if ((outFileName == null) || (outFileName == ""))
     throw new IllegalArgumentException();

   String line, command;

   try
   {
     BufferedReader in =
             new BufferedReader(new FileReader(fileName));

     // Output file
     BufferedWriter out =
             new BufferedWriter(new FileWriter(outFileName));

     if (!in.ready()) throw new IOException();

     while ((line = in.readLine()) != null)
     {
       try
       {
         command = "tracert.exe " + line;
         System.out.println("Executing: " + command);

         Process tracert_proc =
               Runtime.getRuntime().exec(command);
         tracert_proc.waitFor();

         BufferedReader cmdout =
            new BufferedReader(
                new InputStreamReader(tracert_proc.getInputStream()));

         String oline;
         StringBuffer tmpCommandOutput = new StringBuffer();

         while ((oline = cmdout.readLine()) != null)
         {
           // Writes output to a string
           tmpCommandOutput.append(oline).append("\n");

           // Writes output to an output file
           out.write(oline, 0, oline.length()); out.newLine();
         }

         // Display output string
         System.out.print(tmpCommandOutput.toString());

         cmdout.close();
       }

       catch (InterruptedException e) {}
       catch (IOException e)
       {
         System.out.println("I died" + "\n");
       }

     }

     in.close(); out.close();
   }

   catch (IOException e)
   {
     System.out.println(e);
   }

 }
}