The most recent Java version is 1.5.0_08. If youn want to install it than make sure you've uninstalled all previous versions and rebooted. Then use the JRE offline installer to install the new one. You can get it here:
http://java.sun.com/j2se/1.5.0/download.jsp
The preference folder of the 4.12.6 LW version is called " LimeWire" and is located in the hidden Application Data Folder (explanations about it in the link I gave you above).
It is also possible that the McAfee is properly configurated. You should add the listening port of LW to the list of exceptions.
LW>Tools>Options>Advanced>Firewall.....there you'll find the listening port.
