How about this is as a compromise - build an embedded and non-embedded - Then leave it up to the users:
Full Install - 8.4MB - If you don’t have Java 1.4.2 installed or your unsure, use this link
Game only - 5.1MB - If you have Java 1.4.2 installed
Either way, I still don’t see what the big deal is. If you run games (and even other types of software), your hard drive is full of duplicated code. Many C++ games are developed using standard engines, libraries and API’s, should they all start using common external .dlls for those? Do you think they actually would? Why should the C/C++ guys get it easy while we invent new ways to complicate the users experience all to save a bit of disk space?
Hard drive space is cheap - most people are oblivious to the amout of duplicated code they get from C/C++ games. Why would they care any more about duplicated runtime code from Java? This is an issue the Java community created, not the users.