Apple has released Java for Mac OS X 10.7 Update 1 and Java for Mac OS X 10.6 Update 6. In both cases, the updates address about a dozen security vulnerabilities, including one that could allow an untrusted Java applet to execute arbitrary code outside of the Java sandbox. (Free, 62.53 MB and 75.45 MB)
Turn Off Filename Extension Warning
In Leopard, Apple fixed an annoying aspect of working with the Finder in Tiger. Previously, if you changed a file's extension, the Finder prompted for confirmation. But since no one has ever accidentally changed a filename extension, Apple thankfully added an option to turn that warning off in the Leopard Finder's preferences. Choose Finder > Preferences, and in the Advanced screen, deselect Show Warning Before Changing an Extension.
Java for Mac OS X 10.7 Update 1 and Java for Mac OS X 10.6 Update 6
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Comments about Java for Mac OS X 10.7 Update 1 and Java for Mac OS X 10.6 Update 6
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All that said, unless you actually use Java much, or run into Java on the Web a lot, this Java update probably isn't a really important thing to have.