Never mind ! I looked so much through this forum that I copy and paste the wrong ln command, so my link was pointing to the wrong Java file....Well I deleted that by doing
rm /usr/bin/java

and recreated the link as:
ln -s /usr/java/jre1.3.1_02/bin/java /usr/bin

after that doing:
sh runlime.sh
works fine since I downloaded the tgz and not the RPM...