For anyone else encountering this problem (“R cannot be initialized”), it certainly can be related to the path name where Rserve is installed.
I am using KNIME 4.1.0 with R 3.6 on Windows 10 64-bit.
I don’t have access to write to the C:/ drive and use a mapped drive to host my packages. I got the same error as @JamesOllier in java (Caused by: java.io.IOException: Command not found: path-to-Rserve\Rserve.exe). Even though I changed my .libPaths() in R to direct to a path such as “D:/path-to-win-library/” and installed Rserve to that library, KNIME tried to load Rserve using the server name (e.g. \\server), since the server name uses backslashes, it need multiple escape slashes, however only one backslash was loaded as the server path name (e.g. \server\path-to-Rserve\Rserve.exe instead of \\server\path-to-Rserve\Rserve.exe) and therefore the Rserve.exe file could not be loaded.
For me the solution was to get access to place Rserve in my library folder under the R installation (on the C:/ drive).