New unregistered, similiar problem; here's the deal.
Fixed the whole kaffe problem, upgraded to Java 2 SDK, 1.4.0, $PATH is working fine and all. Edited line 3 of LimeWireLinux.bin to correct path, and still got this error when I typed ./LimeWireLinux.bin:

Preparing to Install...
Extracting the resources etc. etc.

Ready to Install...

./LimeWireLinux.bin: /bin/java: No such file or directory.

OK, easy enough to fix, just made a simlink to /usr/java/j2sdk1.4.0/bin/java in /bin. Then the same thing happened, only this time the error pointed to /usr/bin/java. When I repeated the fix (i.e. makign a simlink from the error directory to the working java directory) I recieved the "Exception in thread "main" etc. etc. " that has caused so many headaches thus far.
I'm pretty new with Linux but have done pretty well so far. However try as I might I cannot seem to lick this problem. Any input would be vastly apreciated.