FULL PRODUCT VERSION :
java version "1.7.0_51"
Java(TM) SE Runtime Environment (build 1.7.0_51-b13)
Java HotSpot(TM) 64-Bit Server VM (build 24.51-b03, mixed mode)

ADDITIONAL OS VERSION INFORMATION :
Microsoft Windows [Version 6.1.7601]

A DESCRIPTION OF THE PROBLEM :
When path to Java executables contains an even number of quoted string, this executable is not able to parse the command line arguments.

So, for example:
1/ C:\>"C:\Program Files\Java\jre7\bin\java" -version => works
2/ C:\>"C:\Program Files"\"Java\jre7\bin\java" -version => doesn't work
3/ C:\>"C:\Program Files"\"Java"\"jre7\bin\java" -version => work

On jre 1.6.0_45, all these examples work.

See on java.exe, pack200.exe, keytool.exe

REGRESSION. Last worked in version 6u45

ADDITIONAL REGRESSION INFORMATION:
java version "1.6.0_45"
Java(TM) SE Runtime Environment (build 1.6.0_45-b06)
Java HotSpot(TM) 64-Bit Server VM (build 20.45-b01, mixed mode)

STEPS TO FOLLOW TO REPRODUCE THE PROBLEM :
C:\>"C:\Program Files\Java\jre7"\"bin\java" -version

EXPECTED VERSUS ACTUAL BEHAVIOR :
EXPECTED -
Java version should be displayed:
java version "1.7.0_51"
Java(TM) SE Runtime Environment (build 1.7.0_51-b13)
Java HotSpot(TM) 64-Bit Server VM (build 24.51-b03, mixed mode)
ACTUAL -
Java usage is displayed instead:

C:\>"C:\Program Files\Java\jre7"\"bin\java" -version
Usage: java [-options] class [args...]
           (to execute a class)
   or java [-options] -jar jarfile [args...]
           (to execute a jar file)
where options include:
    -d32 use a 32-bit data model if available
    -d64 use a 64-bit data model if available
    -server to select the "server" VM
    -hotspot is a synonym for the "server" VM [deprecated]
                  The default VM is server.

    -cp <class search path of directories and zip/jar files>
    -classpath <class search path of directories and zip/jar files>
                  A ; separated list of directories, JAR archives,
                  and ZIP archives to search for class files.
    -D<name>=<value>
                  set a system property
    -verbose:[class|gc|jni]
                  enable verbose output
    -version print product version and exit
    -version:<value>
                  require the specified version to run
    -showversion print product version and continue
    -jre-restrict-search | -no-jre-restrict-search
                  include/exclude user private JREs in the version search
    -? -help print this help message
    -X print help on non-standard options
    -ea[:<packagename>...|:<classname>]
    -enableassertions[:<packagename>...|:<classname>]
                  enable assertions with specified granularity
    -da[:<packagename>...|:<classname>]
    -disableassertions[:<packagename>...|:<classname>]
                  disable assertions with specified granularity
    -esa | -enablesystemassertions
                  enable system assertions
    -dsa | -disablesystemassertions
                  disable system assertions
    -agentlib:<libname>[=<options>]
                  load native agent library <libname>, e.g. -agentlib:hprof
                  see also, -agentlib:jdwp=help and -agentlib:hprof=help
    -agentpath:<pathname>[=<options>]
                  load native agent library by full pathname
    -javaagent:<jarpath>[=<options>]
                  load Java programming language agent, see java.lang.instrument
    -splash:<imagepath>
                  show splash screen with specified image
See http://www.oracle.com/technetwork/java/javase/documentation/index.html for more details.


ERROR MESSAGES/STACK TRACES THAT OCCUR :
No error message.

REPRODUCIBILITY :
This bug can be reproduced always.

CUSTOMER SUBMITTED WORKAROUND :
C:\>"C:\Program Files\Java\jre7\bin\java" -version

Or even:
C:\>"C:\Program Files"\"Java"\"jre7\bin\java" -version