Three vulnerabilities have been reported in Oracle Java, which can be exploited by malicious people to compromise a user's system
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However, it's the latest version currently available, and as such, is presumably better to have than earlier versions --- provided you have an actual need for Java.
Many people are finally realizing that Java is less common online than they had been led to believe. I went Java-free about two years ago, and have not regretted that decision.
The Secunia Online Software Inspector (OSI) uses Java http://secunia.com/vulnerability_scanning/online/
but the Secunia Personal Software Inspector (PSI) does not (it uses Flash instead).