if u just run
without any options, it gives u a standard command to run it. I'm on windows at the moment and can't be bothered to check but i think u were trying to make it run in the background as a daemon, waiting for a connection that requires it or something. type
to check what options u were giving it. Just try running
wpa_supplicant -ieth1 -c/etc/wpa_supplicant.conf -dd
and see what happens to begin with to make sure it works. And then if that works fine, and connects u to the network, then start playing around with getting it to run as a daemon.
Be aware that i haven't actually had wpa_supplicant working myself because i can't find the right drivers for my wireless card, so i'm not sure what will happen if it actually does start working.