Sorry for bothering you Taco.  It was my mistake, I'd misread your
very clear instructions.  Instead of

    \setuppublications[database={ora}]

I should've used

    \setupbibtex[database={ora}]

The following test file generates a .aux file:

%output=pdf
%% testbib.tex
\usemodule[bib]
\setupbibtex[database={ora}]
\starttext

    If you have never coded Java before you may want to read through
    {\em Learning Java}\cite[Niemeyer:2000:LJ]

\completepublications
\stoptext
%%EOF

PS. If anyone is trying to replicate, my test case, the database
ora.bib at 

  http://www.math.utah.edu/pub/tex/bib/ora.html

has a couple of entries with illegal characters.  If you just scan
through the database and remove all @Book{ .. } entries that have the
keyword \verb inside them, you'll generate a valid .bbl file, after
running bibtex.

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