There must be something else that is not quite right. I know that certain versions of the Java App have caused a problem. Try visiting this link and download a later version but still uncheck the IE options as before:
Personally I wouldnt. I also had a problem with the Java that was from IB which is why I downloaded it from the Java site and then it worked OK and I hope yours does too as I know how annoying it can be when things like this happen.