Does the system definitely have Java installed?  You can check here: http://www.java.com/en/download/installed.jsp

Is it any different if you run the program as administrator?

Thanks Jonny,
I'll check that when I have access to the machine again. I thought the idea of an executable was that the end user didn't have to install anything else? But apparently Java should still be installed...

Yes, Java is the runtime of the generated exe. It is quite large, so it makes sense to have it installed only once, and make it available for all sketches, and all Java programs, of the computer.
Otherwise, you would get some 85MB of overhead for each exported sketch!

Hi all,

Thanks for your replies! I've installed the latest Java version on the testing machine. Something very strange happened. When I tested the program that generated the error it still gave the could not create error. Then I tried with exactly the same program that ran well on another windows machine and that worked. The only difference in the programs is one variable, setting an int value and the program name.
So I presumed there was an error in the exe. I presumed that recreating it would solve the problem. But it didn't a freshly baked new exe of the error prone program gave again the virtual machine error. The only program that worked was the same program with the other name and variable I mentioned before. Both programs work fine on my windows machine...

Could this have something to do with the different windows versions? (7 for the destination and XP for creation)
Edit: I've bought a Win 7 laptop last Friday and can now test on that platform. I get exactly the same errors and also the one program works on this win 7 machine. Maybe I should note that the program involves using the serial port, maybe things wrong there?
Another edit: I've created a new exe on the win 7 laptop and left the .windows32 in the application folder in tact. Now the program works on my win 7 laptop. Is the naming of the folder that crucial?

Hope to hear your experiences. TIA, d

It's pretty likely that it's related to the serial port.  If you right click on the program and do "Run as administrator" does it work then?  (sorry if you've already tried this)

On my Windows 7 computer with Processing 1.5.1, when I export to application, I have a folder named application.windows, no .windows32 in sight.
In this folder, I have a .exe file, which is just a very small shell that runs the JVM with the jars in the lib folder.
So, the lib folder has to be there. But the folder where the exe is can probably have any name.

I've just run into this exact problem and was able to solve it as follows:
Inside the folder application.windows that Processing generates is another folder called lib and inside that is a file called args.txt.  Open args.txt and where it says "-Xmx2048m" change that to be "-Xmx1024m"

Hi Jonny,

I thought the renaming of the folder would solve it. But that didn't work on the destination machine. With me the args.txt says: -Xmx1600m. I changed that to 1024 and it worked. Great.
Other machines also have this problem. Should we report it as a bug? It seems to have to do with screen size, right?

Best, d.

OK, I've finally discovered what the text in the args.txt means:

Your current memory settings will be exported with the application. If you've set outrageous memory requirements, you might want to undo that before exporting for others, or edit the exported files by hand (Contents/Resources/Info.plist on Mac OS X and lib/args.txt on Windows)

From the Processing wiki: http://wiki.processing.org/w/Export_Info_and_Tips
So if the setting is too high you have to lower it by hand otherwise you get the error mentioned above. Now I just uncheck the maximum memory in the settings to see how that works. Or do you recommend setting this? Tnx, d

It works for me, thx for the solution.

Processing 2.0.1 in windows7, happen the same, "Could not create java virutal machine", until i unchecked maximum memory.

to repeat: 

"Your current memory settings will be exported with the application. If you've set outrageous memory requirements, you might want to undo that before exporting for others, or edit the exported files by hand (Contents/Resources/Info.plist on Mac OS X and lib/args.txt on Windows)"

and again thx.