Update 4/13/12: Run Software Update Again. See Mac Q & A: Yet Another Java Update
You can disable Java as a whole on your Mac, as well as disabling in your web browser as I pointed out last week in my post Mac Q & A: Critical Java Update for Security. But the problem with disabling Java in OS X – as you point out – is that some programs require it.
Java is a popular language because programs written in it can be used on different platforms. i.e one program can run on both Windows and OS X. And that’s why some very popular applications use Java: it saves a lot of time and money for the company that produces the software. Adobe’s Creative Suite – that includes the very popular Photoshop, Illustrator and InDesign applications – requires Java. (And when you install any of those applications, the installer will also install Java on your Mac if it isn’t already there.)
Last week, I pointed out the problems with Java running in a web browser and as a result being vulnerable to the Flashback malware. Disabling Java in your web browser doesn’t disable Java on your Mac as a whole. Disabling Java in your browser prevents Java applets from running in your browser and accessing the Java runtime library on your Mac. So if you need Java for your applications, it’s best to disable Java in your web browser. And then be careful about the websites you may visit that will ask you to install or enable Java in the browser to use the site, like banking sites, GoToMyPC and other heavily interactive sites.

If you want to disable Java in your web browser, you can turn it off in whichever browser your use: either Safari (the Mac default browser), or Chrome (Google’s browser that many people use) or Mozilla Firefox. See Apple’s document on How to disable the Java web plug-in in Safari. For Safari, it’s easy: go to Preferences >> Security Tab >> and uncheck “Enable Java”.
For Firefox users: click Tools >> Add-ons disable the Java plugin(s). And for Chrome, in the address bar, type “about:plugins” or “chrome://plugins/”, scroll down to Java and select “disable”.
Important note: Java and Javascript are two different languages. You may see a checkbox or an option to disable Javascript. Leave Javascript on, as the Flashback malware doesn’t have anything to do with Javascript. And disabling Javascript will impact other features of your web browser. (Javascript has some security problems, but they don’t have anything to do with Flashback.)
Then, if you still want to disable Java on your Mac as a whole, start by using the Java Preferences pane to turn it off. The Java Preferences application is located in the Utilities folder, which is inside your Applications folder. Open Java Preferences and then uncheck the “On” boxes next to the name of the Java Runtime, which, if you’ve updated, will be Java SE 6.
If you’re using 10.7 Lion, Java isn’t installed by default. So if you see nothing in the Java Preferences, or simply don’t have a Java Preferences application, Java isn’t installed. If you are using 10.6 Snow Leopard, Java was installed by default, and you will see the versions listed and can disable them.