Try this version of Java, some people have had trouble with 1.6.0_01. Use the JRE offline installer & remove your current Java version before you install this one.
Archive: Download Java 2 Platform Standard Edition (J2SE) 5.0 Update 11

Did you actually delete the preferences folder, or just reinstall LW? Deleting the prefs folder(s) has helped other people who've had this problem. If you're not sure of your settings within LW's options...make a note of them all beforehand, so you can reset things afterwards.

If you're still stuck then please give us your details. Click on the blue link in my earlier post to see the info we need.