After upgrading to Firefox 3, if you find that you cannot get java to run and you are 100% sure that you have already installed the latest version of java, here is a simple fix (for Ubuntu Hardy Heron).
Open up your Terminal (Applications->Accessories->Terminal).
Type the command
sudo apt-get autoremove icedtea-gcjwebplugin
to remove the icedtea-gcjwebplugin package from your system.
Restart your Firefox 3. The Java runtime should be working now.
(icedtea-gcjwebplugin is a little web browser plugin to execute Java applets. It is targeted for Mozilla and compatible browsers that support the NPAPI. It seems that this has some compatibility issue with Firefox 3.)