I am guessing you are meaning Java 1.7? Personal choice, but it should not cause connection problems as long as you are aware of the issues.
You will need to create a shortcut to the LW java file for it to run under Java 7 (there is an installer available for this.) http://www.gnutellaforums.com/connec...tml#post368755
If you choose to install 64-bit Java, always install/update the 32-bit Java 7 last. Otherwise you will go through the set-up questions again and LW will have moved the settings folder somewhere else and you will not be able to connect.
Not sure if it should need to be done with every Java installation, but right-clicking the Java installer and choosing run as admin. should be done. This does seem to affect LW's ability to connect.