I waited for Apple's updated Java 1.4.1 for Panther after an upgrade left mine in the dysfunctional state described in an earlier hint. After installing the update today, I decided to check to make sure it was working, and I got the same error. I went to Apple's Developer page and read the originally proposed solutions. I then removed the preference file from Terminal:
% sudo rm /System/Library/Frameworks/JavaVM.framework/Resources/version.plistThen I ran the updater again. Upon restart, the error message was gone. Of note, I downloaded the updater to disk from Software Update, but you should also be able to run it from /Library/Receipts.
Mac OS X Hints