Did you try deleting your LW preferences? LW is different to what it used to be so deleting the LW prefs will be a good thing to do.

Which version of Java are you using? You could always try the Java beta 1.6 as it's had good reports. However, in order to use it with LW, you'll need to remove all other Java versions or else LW won't see it. Get the 1.6 here: http://java.sun.com/javase/6/download.jsp JRE "Offline" version which is a 15.72 MB download