The system checks the PATH environment variable to find executables to execute. So when you type 'java' at the command prompt it looks in all the directories listed in the PATH variable, searching for the java command. If you open the file .bash_profile in your home directory, you'll see there's a line in there that starts with PATH= (at least, that's where it is on RedHat, it may be in .bashrc in other distros). You need to add the directory where java is (usr/java/jreXXX/bin/) onto the end of this list.

Here's what mine looks like:

PATH=$PATH:$HOME/bin:/usr/java/jdk1.3.1/bin

Yours needs to be slightly different for your system ie perhaps something like jre1.3.1 instead of jdk1.3.1. It depends on where extactly java is installed.