Windows 7 Java applet doesnt work(TOPCODER)

It would help us if you could provide the exact error message.

Did you uninstall the older version first?. In IE, go to Tools > Internet Options, click the Programs tab, click Manage Add-ons and see if the Java entries appear here and that they are enabled.
Update it to 12. .That's the latest. You could also try cliccking the Jave Icon in the Control panel, open the Advanced tab and see if IE and Mozilla are ticked. It is not mormal to have to uninstall, so try first without. But as you have an error on 11, perhaps in your case you may need to.
You may have to copy over msvcr71.dll from C:\Program Files\Java\jre6\bin\
to the C:\Windows\System32\ directory. This was necessary for Opera 10a to use Java.

I am in XP for the moment, so the directory names might be slightly different, but you should be able to figure it out. I believe you need to have hidden files viewable from Folder properties in Control Panel. I also suggest not having the file extension hidden.

If you are using 64-bit Win7b, there may be other issues.