ScottA hit it pretty close.
I have generally held that "works" James was talking about was more associated with works of the spirit, like Paul....
Galatians 5:19-23 (NKJV) Now the works of the flesh are evident, which are: adultery, fornication, uncleanness, lewdness, 20 idolatry, sorcery, hatred, contentions, jealousies, outbursts of wrath, selfish ambitions, dissensions, heresies, 21 envy, murders, drunkenness, revelries, and the like; of which I tell you beforehand, just as I also told you in time past, that those who practice such things will not inherit the kingdom of God.
22 But the fruit of the Spirit is love, joy, peace, longsuffering, kindness, goodness, faithfulness, 23 gentleness, self-control. Against such there is no law.
This is a contrasting argument. Paul shows what the works of the flesh are and then immediately counters it with fruit of the Spirit. Fruit here can be translated as works or labors and still be in the meaning of what the Greek word karpos is intended. Do a basic word study on that word and it will be clear. Many translators got lazy and just used the word fruit instead of trying to bring across to the reader the contrast Paul was making. This is where dynamic equivalence in translation would help.
So James is not necessarily claiming a "works righteousness" by some strict adherence to legalistic practices, but one of outward example of the works of the Spirit being evident. Faith without works of the Spirit is dead. If one has been regenerated by the Holy Spirit, it will flow out of him in works of the Spirit that are mentioned in the above passage from Paul to the Galatians. Take a look at believers around you sphere of existence, and you can tell from their works of the Spirit if they have actually been regenerated by the Holy Spirit. Sure, we all stumble, but that should be the exception not the norm. We are a work in progress.
And those works of the Spirit mentioned will result in the things James was talking about. Caring for those in need, being there to comfort a fellow believer, and other acts of love and kindness to others for example.
I see no conflict by James to what Paul was teaching. Remember, Paul primarily wrote to gentile believers, where as James, being the head of the Jerusalem church, focused more on Jewish believers. The language that he used that would resonate with those primarily from a Jewish background, and can sometimes trip up those who are not of that background.