dan.stoeckel:
I had the same issue. Resolved it by downloading Java v 7 and installing the desktop version:
http://java.com/en/download/chrome.jsp?locale=enThen copied the bin & lib folders from the java install (c:\program files (x86\java on Win7 64) to overwrite the java\bin and java\lib files in arduino's java subdirectory. Seems the install package could use an update.
Damn! Was searching since 2 Days! Thanks dan! You made my day! 