From the KB
First workaround:
Navigate to the LR install directory and locate a directory named JRE. Rename this directory and move it to a different location on the same machine. Next, copy the jre 1.6 directory from the 1.6 jdk and place it in the LR install directory. Now rename it from JRE 1.6 to just JRE (to match the name of the original JRE that was renamed above).
I tried this and get the following error after stopping the recording. Externalizable read object failed: Error Initializing JVM
Second Workaround:
Starting with LoadRunner 11.* we have a option to specify the External JVM path and this is the recommended approach .
Go to Tools -> Recording Options-> Flex->Configuration and check the option Use External JVM.
External JVM Path should point to the JRE 1.6 folder then.
I do not have a Configuration option in recording options->flex.
Barry