If you are running 4.02+ of php, you have a directory created in unzip is called "extensions", that is where your "extension_dir" config value should point. For me, it was c:\php\extensions. Then, update you path to include the dlls directory under php (I would not copy all this stuff to system32 directory, it has enough M$ garbage in it), for me this was c:\php\dlls.
In your php.ini file, update your info to something like this:
[java]
java.library=c:\jdk1.3\jre\bin\hotspot\jvm.dll;
java.library.path="e:\php\extensions;C:\WINNT\system32;"
java.class.path="e:\php\php_java.jar;c:\jdk1.3\jre\lib\rt.jar;c:\jdk1.3\jre\bin\"
The java.library item above seems to be left out of most of the documentation, but it was required in my win box. It seems the jvm.dll loads it's stuff w/ relative paths, so you must point directly to it in it's home dir.
I changed your java.library.path to include e:\php\extensions which is where php_java.dll should reside.
And last, I added rt.jar to your java.class.path.
This should fix your problems,
Jack