"Could not create Virtual Machine" error when installing Java 7 Update 4

I've been attempting to install the latest version of Java, but I've come across a problem which is fustrating me quite a bit.
When the installation is almost complete, an error message pops up saying "Could not create virtual machine" and then the installation completes.
I've tried looking around on the internet for answers, but everything is Minecraft related. I've print screened the problem here;
http://i50.tinypic.com/2q2k64m.png
Anyone who can help me, I'd be greatly thankful for.

Thanks again, Connor.

Any help?

Not much; did you accidentally install a 64 bit version on a 32 bit system?

kind regards,

Jos

Hello, I'm assuming that you don't have Minecraft installed on your computer. Do you need the latest version of JAVA? Have you tried installing the previous version? Maybe just for troubleshooting purposes.

Hello Jos,
I'm pretty sure I haven't installed a 64 bit version on my 32 bit system, at least I don't think I have...

Hey subzero; in fact, Minecraft is one of the programmes I feel is getting affected by this. Because I can't allocate more or less memory onto Minecraft, someone to do with JVM. I have the latest version of Java, which is one of the things messed up.
I downloaded Java Run time Enviroment 5, to be able to play Minecraft, and although I don't get the Virtual Machine error, I get the same lag spikes as I do with the latest version of Java on Minecraft.