I had a fresh installation of Mountain Lion and installed Java 7. The problem was when I tried to run StandAloneJava applications ML always asked me whether it should install Java 6. Apparently a lot of people have this problem and here is the solution how to solve it.
After fighting against Java 6 from Apple I decided to install Java 7 and have a look into that. To say the least, I still feel quite nauseous so I keep this EXTREMELY short.
If you installed Java from Apple then you have the problem, that you have got a very old Version of Java.