To disable Java Updates on a RDS Host (2008 x64 or 2008 R2) it is not enough to disable the update check in the control panel of the administrator session. Users will still get annoying Java update messages.
Navigate to HKEY_LOCAL_MACHINE\SOFTWARE\Wow6432Node\JavaSoft\Java Update\Policy\
Create a new DWORD value called EnableAutoUpdateCheck, and set it to 0.
Change the key EnableJavaUpdate to 0.
Additionally you can stop the update process from starting by deleting the key HKEY_LOCAL_MACHINE\SOFTWARE\Wow6432Node\Microsoft\Windows\CurrentVersion\Run\SunJavaUpdateSched