Check your security. Do you have any security software such as spyware that might be blocking LW. Some spyware is anti-p2p & actually corrupts the LW program by removing some parts of its functionality. Also, some ISP's provide similar security, they use such programs as PestPatrol. Check all these things.
After doing a removal & cleanup of your system for both LW & Java, it is highly surprising you are still having problems. I still do not know which operating system you are using. If using Vista, you need to set the installer to Admin. Likewise to LW after installing.
If you are using Windows 98, you will need an earlier version of Java 1.6. Sometimes one version of Java works better for some people than others, likewise for versions of LW. So swapping versions might help solve the issue anyway. Archive: Download Java Platform Standard Edition (Java SE) 6u5. If you wish to try an earlier version of LW, see http://www.gnutellaforums.com/340213-post427.html

Other possible issues/solutions: http://www.gnutellaforums.com/window...-problems.html