Right click on my computer and then left click proeprties in the menu that appears.
Goto "Advanced" tab
Click "Environment Variables" button at the bottom
Click "New" under system variables.
Set variable name as "JAVA_HOME" andvariable value to "C:\Progra~1\Java\jdk1.7.0_03". Be sure to use your correct version and if you have saved it outside of the default location you will need the correct path. Also note we have not added the bin directory on the end. Notice we have not got any spaces in our value.
Find the Path variable, highlight it and click edit.
Add "%JAVA_HOME%\Bin;" to the beginning of the current value. BE SURE TO LEAVE THE CURRENT VALUE INTACT.
Click ok a few times to close the windows.
Restart Titanium and try see if your error goes away.