Here we go again. I reinstalled both JRE and JDK into folder C:\Java and changed the path to point the new installation, and still not working. This is indeed a very strange case. I have a feeling it has something to with Vista, but can not be sure. Test results below, everything looks like normal.
C:\Java\jdk1.6.0_07\bin>javac
Usage: javac <options> <source files>
where possible options include:
-g Generate all debugging info
-g:none Generate no debugging info
-g:{lines,vars,source} Generate only some debugging info
-nowarn Generate no warnings
-verbose Output messages about what the compiler is doing
-deprecation Output source locations where deprecated APIs are used
-classpath <path> Specify where to find user class files and annotation processors
-cp <path> Specify where to find user class files and annotation processors
-sourcepath <path> Specify where to find input source files
-bootclasspath <path> Override location of bootstrap class files
-extdirs <dirs> Override location of installed extensions
-endorseddirs <dirs> Override location of endorsed standards path
-proc:{none,only} Control whether annotation processing and/or compilation is done.
-processor <class1>[,<class2>,<class3>...]Names of the annotation processors to run; bypasses default discovery process
-processorpath <path> Specify where to find annotation processors
-d <directory> Specify where to place generated class files
-s <directory> Specify where to place generated source files
-implicit:{none,class} Specify whether or not to generate class files for implicitly referenced files
-encoding <encoding> Specify character encoding used by source files
-source <release> Provide source compatibility with specified release
-target <release> Generate class files for specific VM version
-version Version information
-help Print a synopsis of standard options
-Akey[=value] Options to pass to annotation processors
-X Print a synopsis of nonstandard options
-J<flag> Pass <flag> directly to the runtime system
C:\>java -version
java version "1.6.0_07"
Java(TM) SE Runtime Environment (build 1.6.0_07-b06)
Java HotSpot(TM) Client VM (build 10.0-b23, mixed mode, sharing)
C:\>set
ALLUSERSPROFILE=C:\ProgramData
APPDATA=C:\Users\Sami\AppData\Roaming
CLASS_PATH=.;
CommonProgramFiles=C:\Program Files\Common Files
COMPUTERNAME=SAMI-PC
ComSpec=C:\Windows\system32\cmd.exe
configsetroot=C:\Windows\ConfigSetRoot
FP_NO_HOST_CHECK=NO
HOMEDRIVE=C:
HOMEPATH=\Users\Sami
LOCALAPPDATA=C:\Users\Sami\AppData\Local
LOGONSERVER=\\SAMI-PC
NUMBER_OF_PROCESSORS=2
OS=Windows_NT
Path=C:\Windows\system32; C:\Windows; C:\Windows\System32\Wbem; C:\Java\jdk1.6.0_07\bin; C:\Program Files\Microsoft SQL Server\90\Tools
\binn\; C:\Program Files\MATLAB\R2008a\bin; C:\Program Files\MATLAB\R2008a\bin\win32; C:\Program Files\SSH Communications Security\SS
H Tectia\SSH Tectia AUX; C:\Program Files\SSH Communications Security\SSH Tectia\SSH Tectia AUX\Support binaries; C:\Program Files\SSH
Communications Security\SSH Tectia\SSH Tectia Broker; C:\Program Files\SSH Communications Security\SSH Tectia\SSH Tectia Client; C:\Pro
gram Files\jprofiler5\bin\windows;
PATHEXT=.COM;.EXE;.BAT;.CMD;.VBS;.VBE;.JS;.JSE;.WSF;.WSH;.MSC
PROCESSOR_ARCHITECTURE=x86
PROCESSOR_IDENTIFIER=x86 Family 6 Model 15 Stepping 10, GenuineIntel
PROCESSOR_LEVEL=6
PROCESSOR_REVISION=0f0a
ProgramData=C:\ProgramData
ProgramFiles=C:\Program Files
PROMPT=$P$G
PUBLIC=C:\Users\Public
SESSIONNAME=Console
SystemDrive=C:
SystemRoot=C:\Windows
TEMP=C:\Users\Sami\AppData\Local\Temp
TMP=C:\Users\Sami\AppData\Local\Temp
USERDOMAIN=Sami-PC
USERNAME=Sami
USERPROFILE=C:\Users\Sami
VS90COMNTOOLS=C:\Program Files\Microsoft Visual Studio 9.0\Common7\Tools\
windir=C:\Windows
Before you post, read our: 
Maybe it indeed is some other program that is messing the Java installation, but that will definitely take ages to find it out as I have dozens of programs installed. Maybe I just have to stick with IDE's until that. But if you get an idea what might be the problem or if you notice something wrong with my settings, please let me know...
