First is the update is for OS X 10.7 Lion only, and will not install on other versions of OS X. While this is good news for OS X, if you plan on trying the software out then there are some details about the Java 7 release that you should know. Download and run the Java installer package to install the Java 7 runtime. This update is good news for Java developers, and for end users who run Java code on Mac systems, as it is the first step for OS X to maintain the most up-to-date version of Java in OS X. Java's parent company Oracle has taken up the reins for Java development in OS X, and yesterday announced the first version of the upcoming Java SE 7 runtime for OS X.
The Java SE 6 runtime that has shipped with past versions of OS X and which has been available on-demand for Lion users is the last version that Apple will officially support in OS X, but this does not mean Java for OS X is dead.