Updating java while c9 is running is sometimes problematic.  C9 holds onto files java wants to update, stopping those files from updating causing java to be half-updated, and sometimes broken.

Problem is really java's fault, it should detect that it is trying to install while it is already running and ask you to kill c9 first.

If for example you update to java 8 while c9 is running on java 7, after restart you might see something like this:

To fix this, you need to uninstall java in the control panel. Uninstall all running copies of java.

Then goto http://java.com/ and install java fresh.