I have the latest version of Java (6). I can't install Java 7 because I'm not running Lion it said.
I think the problem is that security warning that is supposed to come up and you're supposed to allow, never comes up - even after clicking insert. When I upgraded Java on my PC, it popped up that message, I clicked allow and it worked. But after upgrading Java on my Mac, that little thing never came up for me to allow
I also got that "it's unsafe" message too, when on my PC. The problem is basically after upgrading to the latest version of Java on my Mac - I can not get that security risk or "allow" screen to pop up - so frustrating! Are you on a Mac?