I get a stack trace when clicking Run (on any program). Here are the
console details:

11/02/10 07:03:47 [0x0-0x104104].org.processing.app[2095] [JavaAppLauncher]
Requested [1.5*], launching in [1.6] instead.
11/02/10 07:04:14 [0x0-0x104104].org.processing.app[2095] Exception in
thread "Thread-4"
11/02/10 07:04:14 [0x0-0x104104].org.processing.app[2095] java.lang.Error:
Unable to launch target VM: java.io.IOException: Cannot run program "java":
error=2, No such file or directory
11/02/10 07:04:14 [0x0-0x104104].org.processing.app[2095] at
processing.app.debug.Runner.launchVirtualMachine(Runner.java:421)
11/02/10 07:04:14 [0x0-0x104104].org.processing.app[2095] at
processing.app.debug.Runner.launch(Runner.java:122)
11/02/10 07:04:14 [0x0-0x104104].org.processing.app[2095] at
processing.app.Editor$43.run(Editor.java:1652)
11/02/10 07:04:14 [0x0-0x104104].org.processing.app[2095] at
java.lang.Thread.run(Thread.java:637)

Processing 1.0.9.
Mac OS X Snow Leopard (10.6.2) on an intel MacBook Pro.

java version "1.6.0_17"
Java(TM) SE Runtime Environment (build 1.6.0_17-b04-248-10M3025)
Java HotSpot(TM) 64-Bit Server VM (build 14.3-b01-101, mixed mode)

P.S. When running in Java 1.5 the error remains the same:

Exception in thread "Thread-4" java.lang.Error: Unable to launch target VM:
java.io.IOException: java: not found
at processing.app.debug.Runner.launchVirtualMachine(Runner.java:421)
at processing.app.debug.Runner.launch(Runner.java:122)
at processing.app.Editor$43.run(Editor.java:1652)
at java.lang.Thread.run(Thread.java:613)

You've installed Java 1.5 on a Snow Leopard machine?

Yes, just to see if that might be a solution. It wasn't.

It sounds like you've done something to break your PATH environment
variable. Like you've set something strange in your environment file, an rc
file of some sort, or otherwise broken your machine setup so that OS X
can't find the path to /usr/bin/java. It's not a Processing bug.

OSX finds it just fine when I try from the terminal:

$ ls /usr/bin/java
/usr/bin/java
$ echo $PATH
/sw/bin:/sw/sbin:/usr/local/bin:/opt/local/bin:/usr/bin:/bin:/usr/sbin:/sbin:/usr/local/bin:/usr/X11/bin:/Developer/Tools/Panda3D:/usr/texbin:/usr/local/bin:/Users/kdschutt/applications/lisp/cmucl-2007-10-x86-darwin/bin:/Users/kdschutt/applications/darcs/:/Users/kdschutt/work/3rd_party/btyacc/bin/:/Users/kdschutt/work/3rd_party/gdk-1.4.4/bin/:/usr/X11R6/bin
$ java -version
java version "1.6.0_17"
Java(TM) SE Runtime Environment (build 1.6.0_17-b04-248-10M3025)
Java HotSpot(TM) 64-Bit Server VM (build 14.3-b01-101, mixed mode)
$ which java
/usr/bin/java

The PATH variable is not broken; not from the terminal at least.

Workaround for this invalid bug: grab Processing from svn, build it with
ant and then do:

ant run

Works just fine then.

I also tried the newly created Processing.app, but that shows the same
problem I reported earlier.