There is a problem with disabling Java Update when you're running Vista/2008/7 with UAC enabled. Trying to disable automatic updates through the control panel does not work as the setting will not "stick"

The problem is caused by an oversight of Sun. Running the configuration applet from Control Panel means it gets started as a unprivileged user, and the automatic update setting cannot be changed by such a user.

Solution

Rather than simply kick out jusched.exe from the registry (HKLM\SOFTWARE\Microsoft\CurrentVersion\Run, there's another way. Open an Explorer and manually find the control panel file (called javacpl.exe); default is this: C:\Program Files\Java\jre6\bin\javacpl.exe. Right-click and run it as an Administrator, and then disable the automatic updates.

A note about 64-bit: 32-bit and 64-bit version of Java are two different things. If you want to disable updates on them, adjust your installation paths accordingly. The applet filename (javacpl.exe) remains the same, though.

Notice

Apparently, when installing a new version of Java, you need to re-disable automatic updates. An alternative to avoid this is by using scripted installation, as documented here: http://blog.stealthpuppy.com/unattended/unattended-install-sun-jre-16-update-10.

Alternative solution

An alternative solution is to use the Registry editor to change the automatic update feature. As an administrator, start regedit, navigate to the key HKLM\Software\JavaSoft\Java Update\Policy\EnableJavaUpdate and set it to 0.
The advantage to this method is that it disables automatic updates for all users.