Looks like you've only installed the JRE (Java Runtime Environment). You also need to install the JDK (Java Development Kit -- get it from Sun's website). The JDK includes the 'javac' command-line utility.
You'll also need to make sure you have the proper paths added to your %PATH% variable. Right-click My Computer >> Properties >> Advanced >> Environment Variables.
Once there, look for the env. variable called "Path". Append the path to the 'bin' directory for your JDK to that (you should be able to figure out how to do this, using other added paths as examples). I would give you an example of where your JDK path might be, but I don't have it installed right now -- last I remember, it's in liek "C:\Program Files\Java\JDK\bin", or something very similar to that.
When using the command line:
'java' is used to run compiled (in to byte-code) Java programs.
'javac', obvious, is the Java compiler.
The usage is this ('Kitty.java' is the name of an imaginary Java source-code file):
javac Kitty.java
<compiles 'Kitty.java' in to a file called 'Kitty.class'>
java Kitty
When you want to run Java programs, you only have to use its name - you cannt put "java Kitty.class".
Hope this helpz!