I encountered this awhile ago and it was some spyware that used the JVM to do its work. Have you done the usual Adaware, Spybot, Cwshredder and Housecall scans?
After having my harddrive formatted by the computer store, I came home and loaded driver for my printer with the CD. I received the message; "Java Virtual Machine cannot be loaded. Class not Registered."
In spite of this printer is working. Do I have a problem with JVM?