You need to have downloaded the latest Java Development Kit: http://www.oracle.com/technetwork/java/javase/downloads/jdk-6u25-download-346242.html
Then once its installed open the command line (type cmd into the search bar and hit enter). Type java and hit enter into the command line and it should come up with commands to do regarding Java. If so then it has found it.
Uninstall and reinstall if you have already done this as sometimes the 'CLASSPATH' becomes faulty. If it still didn't work right-click My Computer -> Properties -> Advanced System Settings -> Environment Variables and look for a variable called 'CLASSPATH'. If it isn't there you need to add a new one and point it to where you installed Java.
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