Looks like you have the jre installed, but not the jdk. Click the "Find" button and start a find in the "C:\Program Files\Java" directory. It may appear after that but you should delete the duplicate entry for your current jre.
EDIT: java control panel is a real set of asterisks it just doesn't work properly. So instead of this hit the "browse" button from select VM and go to "C:\Program Files\Java" and there should be a directory starting with jdk.
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MSI P43 Neo|Enermax Pro82+ 425W|E5200|silent 8500GT|250GB Samsung spinpoint F1|Samsung SATA DVD RW|4GB Corsair|Antec SOLO|openSUSE11
There are in order of increasing severity: lies, darn lies, statistics, and computer benchmarks. - diskinfo man page
It does tell you to select the executable at the top of the browse dialogue.
__________________
MSI P43 Neo|Enermax Pro82+ 425W|E5200|silent 8500GT|250GB Samsung spinpoint F1|Samsung SATA DVD RW|4GB Corsair|Antec SOLO|openSUSE11
There are in order of increasing severity: lies, darn lies, statistics, and computer benchmarks. - diskinfo man page
MSI P43 Neo|Enermax Pro82+ 425W|E5200|silent 8500GT|250GB Samsung spinpoint F1|Samsung SATA DVD RW|4GB Corsair|Antec SOLO|openSUSE11
There are in order of increasing severity: lies, darn lies, statistics, and computer benchmarks. - diskinfo man page