I've been using TextPad for simple Java programs since TextPad 3. I haven't upgraded from 6.2.2 yet, so I can't even try to test 7, but what I recall is that there was a one-time-only special setup in the Configure>Preferences... dialog under Tools that would add the three Java tools:
1 : Compile Java
2 : Run Java Applet
3 : Run Java Application
In most cases, with editors and IDEs, things work out best if you add the compiler and development kits before trying to install the IDE/Editor. With TextPad, it's better if you use the interally-generated tools above, instead of trying to create your own.
That's especially true with applets. The appletviewer.exe tool from the JDK runs an HTML file, not a Java class. TextPad has a special feature in the internally-generated "Run Applet" tool that creates a temporary HTML page with just the named applet in it, and launches appletviewer to display it.
That's not possible in the command setup for user-defined tools, so you's have to make your own tool to duplicate the TextPad functionality, and then use your tool as a front-end for appletviewer. That won't be as easy as just letting TextPad do it.
The TextPad Java FAQ might be helpful:
http://www.textpad.com/support/faq/java.html
@McFate: I agree for anything serious. A full-featured IDE is nice. However, I can get a simple test of a computational idea or syntax twist coded and run under TextPad in the time it takes either Eclipse or NetBeans to simply launch. (...or so it seems, sometimes. :^)