What is the exact message you're getting that makes you think ePO sees java as a virus?
There has to be more information than that. Look at the log (usually in Documents and Settings\All Users\Application Data\McAfee\DesktopProtection in XP/Windows 2003). What does it say? Or check in the event log, what is the exact message? Virus detected and removed? Or is it a timeout?
It gives a 1059 event ID and scan timeout.
There are different ways to handle timeouts depending on your environment and your goals. What do you want to happen? If you have a file that consistently times out on scanning and you are willing to accept the risk of not scanning that file, exclude it from scanning. If you're mostly interesting in your reports looking nicer, filter the events at the ePO server.
This is also a bit difficult to answer because I don't know what version of VSE and what version of ePO.
Here's a link to the Best Practices Guide McAfee® ePolicy Orchestrator® for use with ePolicy Orchestrator versions 4.5.0 and 4.0.0:
See page 98 for information on how to filter the events so your reports look nicer.
Search the Knowledge Base for information on how to configure exclusions for VirusScan Enterprise. I'd post links, but the site is extremely slow for me and I don't have 10 minutes to wait for a page to load