Android SDK didn’t find the Java Development Kit (JDK) on your system. Android sdk error failed to find java version.
This error normally show on windows 64 bit PC.
I have JDK SE7u4 installed in windows 7 64 bit PC. I tried to install Latest Android on Windows 7 but no use.
The setup window showed the message saying that the Java SE JDK not found and
ERROR: Failed to find Java version for C:WindowsSystem32java.exe
The system cannot found the file specified.
If you believe you have a JDK installed and it was not properly recognized, simply set an environment variable JAVA_HOME to point to it
Now how I solved the error :
1. Open Control Panel/System – to get system file you may have to click view by small icons
2. Select Advance System Setting from left panel.
3. A System Properties Dialog will pop up.
4. Click on Environment Variables…
5. Click New button on System Variables section.
6. Enter ‘JAVA_HOME’ in variable name field and enter the location of the java sdk folder in Variable value field.
Example : C:Program FilesJavajdk1.7.0_05
Click Ok and Apply….
Now try to install Android SDK again and that will 100% work 
Cheers!
Thanks a lot. That just worked for me.
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Worked for me. Thanks a lot