When you've installed Tomcat for the first time sometimes the problem you had occur. In that case, just re-booting the machine would solve this problem. If the problem persists, check the following:
Try make sure you have the JDK verion of the Java not the JRE. Also ensure your JAVA_HOME is pointing to the right directory (eg C:\Program Files\Java\jdk1.5.0_04 OR wherever you've installed your java). Also the bin directory under JAVA_HOME is added to your PATH environment variable.