Windows Vista: For some reason the last few versions of the JDK break the JRE for web browsers and the environment variables. The solution to the environment variables is..
=Add System Variables=
- JAVA_HOME should have just the root of where the jdk is installed
- e.g. C:\Program Files\Java\jdk1.6.0_24
- PATH
- should then have %JAVA_HOME%\bin added to it
- CLASS_PATH
- In some cases this might be needed according to some websites, but I didn't add it to mine.
This setup worked for getting the Android SDK environment to work, as well as leaving the JRE web browser functionality in place.
-- edit --
As a note, you may have to press back and forward a few times on the Android SDK to get it to go when it says JDK not found. Not sure why it does that.