Graphics should never be an issue. They are just "things" (objects) and as such can't cause you much of an issue (as long as you compress them properly for web use)
When you re-installed did you accept the default locations (not custom)?
Are you using IE8 (not beta 9)
Do you have JRE 1.6 selected?
On the java issue, you can use this URL to check to make sure you have the latest version installed:
http://www.java.com/en/download/installed.jsp
If you do have latest installed you can reset the JRE that Fusion uses on the application settings palette. See this tutorial for details (ignore the beginning of the tutorial as it does not pertain to Version 12 only earlier versions)
http://www.gotfusion.com/tutorials/t...temID=4037#jre