When you deleted your preferences folder, did you also look for a folder in the old location of C:\Documents and Settings\your name\.limewire? That folder's not hidden. Look for that one & delete it if you find it.

Did you find a prefs folder in the new location of C:\Documents and Settings\your name\Application Data\LimeWire (this one's hidden by default)?

Look for those folder(s) again, delete what you find & then try reinstalling Java once more. Sorry - it sounds like a pain but give it a try. Make sure to use the JRE offline installer for Java.
http://java.sun.com/javase/downloads/index.jsp