MacOS comes with versions of Java going back as far as 1.3. See /System/Library/Frameworks/JavaVM.framework/Versions. The only time you need to install from a package is when the latest Java is newer than your OS version and you can't use the Software Update for some reason.
The vendor of your application should really take responsibility, but you can probably fix the problem by editing the .plist of the app. Right click the application and choose Show Package Contents then open the Info.plist file with a text editor. You'll see a Java dictionary in that file and a key JVMVersion. Change the value to 1.5* (1.4+ would mean anything after version 1.4, 1.6* would be any version of 1.6.) That will get your app running in Java 1.5.
However this may not be the whole story. Along side the Info.plist, you'll find MacOS/JavaApplicationStub. This is the actual MacOS X Binary that launches the JVM. The developer may have shipped their app with an old version of this file that is not compatible with your OS. You'll have an up to date copy of this file on your machine already at /System/Library/Frameworks/JavaVM.framework/Versions/Current/Resources/MacOS/JavaApplicationStub. Replace the application's version with this one.
The application might still not run because (for example) it can't load 32-bit native libraries after being launched as 64-bit. In that case you can strip out the 64-bit portion of the Stub with the lipo command: lipo -remove x86_64 JavaApplicationStub -output JavaApplicationStub
Hope this works. And if it does, be sure to let the developer of the app know of course.
When you install Snow Leopard you will be given the option of migrating your files and such from a variety of locations: (eg. another Mac, another partition, a Time Machine Backup, or just another startup disk). This will bring back nearly everything from your home folder (Caches are usually not copied) onto your new partition and you're good to go.
If you need to do this after an install you can run it manually using Migration Assistant.app (found in the Utilities folder).
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