Since August 2012 updates for Java (and especially Java Runtime Environment, which is what you actually need) must now be downloaded direct from Oracle:
Further information here:
There is some comment in the link about uninstalling Java 7 and reinstalling Java 6, but the instructions are not so clear. I tried installing Java 6, but I received a message that it could only go onto Mac 10.6. I don't think that I want to retrograde my whole system.
I reloaded Java 7, but that made no difference.
The problem seems to be linked to an issue between Apple and Oracle. Mac 10.7 no longer supports Java and the Java 7 downloads are not working on 10.7
Apple has forced us to download.
Apple forced no one to install that update. They offered it and you chose it. Works a champ on my machine.
However, if you need the Jave 6 JRE and plug-in, MadMAC0 has posted at https://discussions.apple.com/message/20107182?ac_cid=tw123456#20107182
Apple has posted (10/22/12) the approved solution for restoring the Java 6 plug-in: