I wish it was that simple, but JAVA keeps getting updated not only to add features, but often to fix security bugs. With changes in how JAVA works, it is hard for a developer like FileMaker to do anything until the new version comes out and then work through the changes. JAVA is just not something Apple or FileMaker controls and you can see them getting away from it in Lion on the Mac because it doesn't come preloaded anymore.
The idea of doing it in JAVA meant it could be used easily across many platforms without modification. It seemed like a really good idea at first, but has had some headaches since then. The alternative is write it in another programming language that is not changing as much and doesn't have so many backwards compatibility issues, but would have to be compiled differently for each operating system like we had back in version 8. Maybe a slick HTML5 front end would be a better way to go in the future, but that assumes you have a web engine going.
While a bit annoying, if you're keeping up with the latest versions of the OS and FileMaker, you really don't have problems. And I recommend doing this for security purposes if the computer is on the public Internet. But I agree with you that it has been frustrating and the reality is rarely are people on the current version of both the OS and FileMaker.
I will wind back the last bit of my question, as this seems to be a Java cache issue, deleted all the items from it and all is working.
This is more difficult because I get to connect to FMServer but not the machine remotely so had to go to their office to check out the problem as I couldn't manage things otherwise.