Here is a fast way to fix this temporarily:
Launch Terminal (Applications > Utilities > Terminal)
Enter:
sudo /usr/libexec/PlistBuddy -c "Delete :JavaWebComponentVersionMinimum" /System/Library/CoreServices/CoreTypes.bundle/Contents/Resources/XProtect.meta.plist
Enter your Mac OS X password.
This deletes this file until Apple sends it to your computer again via XProtect (which is just the name of the file, Apple doesn't name this process to the public).
This DOES impact Java 6, as well as Java 7. All the news articles today state this is a Java 7 issue, which is incorrect.
THIS IS A NIGHTMARE FOR ENTERPRISE JAVA USERS. Oracle EBusiness uses Java as a web application. For Apple to do this, and not even give a head's up to their customers who utilize Macs for Enterprise, is horrendous customer service. A dialogue box that at least tells their users WHY Java has suddenly, in the middle of the day, quit working would be more helpful than the nonsense that happened today.