I'm guessing you're using Panther, right? Yeah I feel a little similar about "some" of the things you said. And why should we have to pay for Tiger or Leopard.
But getting to the point of your problem, Take et voilą's suggestion about the "offline" Java 1.4.2 update 2 installer. It seems to generally do the job of fixing this Java saga.
http://www.apple.com/downloads/macos...update142.html If it doesn't let you install it, then remove the Java142_update2.pkg file from the receipts folder;
Receipts folder sample image After that, repair permissions by rebooting whilst holding down SHIFT key until you see the Safe Booting message. Then after fully started up, Open Disk Utility from the Utilities folder & Repair permissions. Then reboot normally & try LW then.
BTW I recently (some days ago) upgraded to Tiger & installed Java 1.5, & on "my" system, LW seems to behave much better with it than Java 1.4.2 did in Panther. LW behaves faster & has yet to crash after a few days of heavy use. (I have large no. of incomplete & shares.) VM & ram is very consistent.