Prior to Mountain Lion, Java was bundled with OSX. It seems that during the upgrade, the Java 6 version I had on my machine was removed, apparently due to a security issue with the Java runtime. This means you're forced to install the latest version, which fixed this security problem.

So I went to /Applications/Utilities/ open a Terminal and executed the following command:
java -version ==> "No Java runtime present…" A window prompted asking to install Java.Click “Install” and get the latest version.I installed it but right after I downloaded and installed the JDK SE 7 from Oracle.

After installation, open the Java Preferences (Launchapad/Others ) and you will see:

Now I knew I had two versions of Java, but which one am I using?

$ java -version
java version "1.6.0_35"
Java(TM) SE Runtime Environment (build 1.6.0_35-b10-428-11M3811)
Java HotSpot(TM) 64-Bit Server VM (build 20.10-b01-428, mixed mode)

So what if I want to use JDK SE 7 from Oracle?

Then I just had to drag Java SE 7 in the Java Preferences window to the first position in the list.

This time:

$ java -version
java version "1.7.0_05"
Java(TM) SE Runtime Environment (build 1.7.0_05-b06)
Java HotSpot(TM) 64-Bit Server VM (build 23.1-b03, mixed mode)

I said to myself, "Let’s find out more out how Java is installed on OS X." So I dug for more.

There are some very useful commands: whereis and which and ls -l.

whereis java ==> /usr/bin/java
ls -l /usr/bin/java ==> /System/Library/Frameworks/JavaVM.framework/Versions/Current/Commands/java

When I saw this I was a little bit curious so I went to list the Versions directory:

cd /System/Library/Frameworks/JavaVM.framework/Versions
ls ==>
1.4 1.5 1.6 A CurrentJDK
1.4.2 1.5.0 1.6.0 Current

Now why do I have this old versions of Java on my machine? I asked on Ask Different:
http://apple.stackexchange.com/questions/57986/multiple-java-versions-support-on-os-x-and-java-home-location

$ sw_vers
ProductName:	Mac OS X
ProductVersion:	10.8.1
BuildVersion:	12B19
$ ls -l /System/Library/Frameworks/JavaVM.framework/Versions
total 64
lrwxr-xr-x  1 root  wheel   10 Sep 16 15:55 1.4 -> CurrentJDK
lrwxr-xr-x  1 root  wheel   10 Sep 16 15:55 1.4.2 -> CurrentJDK
lrwxr-xr-x  1 root  wheel   10 Sep 16 15:55 1.5 -> CurrentJDK
lrwxr-xr-x  1 root  wheel   10 Sep 16 15:55 1.5.0 -> CurrentJDK
lrwxr-xr-x  1 root  wheel   10 Sep 16 15:55 1.6 -> CurrentJDK
lrwxr-xr-x  1 root  wheel   10 Sep 16 15:55 1.6.0 -> CurrentJDK
drwxr-xr-x  7 root  wheel  238 Sep 16 16:08 A
lrwxr-xr-x  1 root  wheel    1 Sep 16 15:55 Current -> A
lrwxr-xr-x  1 root  wheel   59 Sep 16 15:55 CurrentJDK -> /System/Library/Java/JavaVirtualMachines/1.6.0.jdk/Contents

It seems all the old versions are links to the CurrentJDK version, which is the Apple version, except A and Current which is linked to A. I read something about this on this question. For me, A acts like a temp variable. If in Java Preferences you set this in the first position, Java 6 from Apple A will have Java 6 from Apple. If you put on the first position Java SE 7 from Oracle, A will point to this version. Current points to A.

/java -version
java version "1.6.0_35"
Java(TM) SE Runtime Environment (build 1.6.0_35-b10-428-11M3811)
Java HotSpot(TM) 64-Bit Server VM (build 20.10-b01-428, mixed mode)

./java -version
java version "1.7.0_05"
Java(TM) SE Runtime Environment (build 1.7.0_05-b06)
Java HotSpot(TM) 64-Bit Server VM (build 23.1-b03, mixed mode)

This means that this current directory will point to the first Java Version found in the Java Preferences. Now take a look at the following:

lrwxr-xr-x  1 root  wheel   59 Sep 16 15:55 CurrentJDK -> /System/Library/Java/JavaVirtualMachines/1.6.0.jdk/Contents

This means Java from Apple is actually installed here: "/System/Library/Java/JavaVirtualMachines/1.6.0.jdk/"

What about Java SE 7? I could search the filesystem to see, but I found an easier way:

If, in Java Preferences, Java SE 7 is in the first position ==>

$ /usr/libexec/java_home
/Library/Java/JavaVirtualMachines/1.7.0.jdk/Contents/Home

If Java SE 6 (System) is in the first position ==>

$ /usr/libexec/java_home
/System/Library/Java/JavaVirtualMachines/1.6.0.jdk/Contents/Home

So Java on Mountain Lion (OSX) is more likely to be installed in one of these locations:

• /System/Library/Java/JavaVirtualMachines
• /Library/Java/JavaVirtualMachines
• ~/Library/Java/JavaVirtualMachines

What about /System/Library/Frameworks/JavaVM.framework/Versions? It seems like this is linked to the so-called "Java bridge." Here it seems to be the native part of the Java on OSX installation.