I wanted to update my java on steam to see if it would improve my performance so I downloaded Java 1.7 and pasted over the old java folder in C:\Program Files\Steam\steamapps\common\spiral knights. I made a copy of the old java folder beforehand. Then I pasted all the files that were missing in the new java_vm (Java 1.7) folder that were originally in the old java_vm (Java 1.6) folder like the server folder and some .dll files.
I have noticed the performance was slightly better, but I have noticed like two bugs. One, I couldn't minimize the mission objectives in FSC like I usually could. Two, I have noticed some white bars in the trade chat room. They probably did some fancy bordering in their message and it somehow ended up as white bars for me. Those two bugs don't seem to matter much to me, but I may encounter a bug I do not like later on.
I was wondering what is the proper way to update Java off of Steam? I have searched for threads about it but I could not find anything useful.
I suggest you reinstall both Java versions, with the official installers. I'm not sure how you paste files from one Java version over the other, but please do not do that again.
Java installation is NOT just the files. There are registry settings, and there are files copied to Windows' System folder. What you did were likely incomplete, and messed up your environment.
Go to your Control Panels, Programs and Features, and uninstall all instances of Java from there. And only after that you delete the directories you fiddled with.
Then download the official installers for latest JRE (Java Runtime):
http://www.oracle.com/technetwork/java/javase/downloads/jre-7u3-download...
If you are running 64-bit OS, you'd want to install BOTH 32 and 64 bit versions.
The installer anticipates you installing multiple versions of JRE. So go ahead and install 1.6 and then 1.7. 1.7 will be used by default, and you can still run 1.6 if you want for some reason.