I was just going to suggest both those things. To avoid the spaces and short name weirdness another thing you could try is using linkd.exe to create a symbolic link from say c:\java to your install location.

If you don't have linkd.exe it is at

http://www.microsoft.com/downloads/details.aspx?FamilyID=9d467a69-57ff-4ae7-96ee-b18c4790cffd&displaylang=en