2012-1723 was the massive "Blackhole" exploit last summer that caused people to think their Java was compromised, or needed an update. It basically gives you a popup very similar to Java's runtime update notification, and installs their tools when you think you are updating Java.
Another name for that virus is Java/Dldr.Lamar.BD
Update your Java to the latest version as it's been patched a few months ago. Chances are you are already patched against it and your AV is just giving you a notification they tried to push the attack on you.
Only update your Java software from the official source, and not from mirrors or sites like CNET. Fake versions get put there all the time.
http://java.com/en/download/index.jsp