What is installed with Java 7? Inspired by this question on Stackoverflow, I noticed that my Java control panel reports that I have the latest version of Java installed (and I know that, because Safari is not blocking the plugin any longer), while the command line version seems to be different.

From Terminal:

$ java -version
java version "1.7.0_06-ea"
Java(TM) SE Runtime Environment (build 1.7.0_06-ea-b20)
Java HotSpot(TM) 64-Bit Server VM (build 23.2-b09, mixed mode)


Java 1.7.0_06 is not the latest version, as far as I know.

Hence my question:

If I install Java 1.7 from Oracle's web site and then rely on the "automatic" updating that it provides, will the command line version be stuck with the old version? A bit confused here.
The Java Control panel in System Preferences refers to the Java Applet Plugin (JRE) that is made available to Safari and other browsers.

If you use the Help>Installed Plugins you should see a version signature if it is enabled The latest JRE reports

application/x-java-applet;jpi-version=1.7.0_13  


The java you are looking at with java -version is the one installed with the full JDK. You  need to download the installer for that separately now from Oracle
When installed java -version should report

java version "1.7.0_13"
Java(TM) SE Runtime Environment (build 1.7.0_13-b20)
Java HotSpot(TM) 64-Bit Server VM (build 23.7-b01, mixed mode)