Here's a quick explanation of what just happened:
Problem 1 - Azureus dependencies can't install
Because java-check-environment is reporting a bad environment
Because you don't have a java developer's environment installed (a jdk)
Solution attempt- emerge -av sun-jdk
This installed a current jdk on your system (java 1.5, a generation 2 jdk)
Problem 2 - You needed a generation 1 jdk. (java 1.4* is a generation 1)
Solution attempt- Tried installing a virtual/java-1.4
This would have your gen-2 jdk pretend to be a gen-1.
Problem 3 - This didn't work. For some reason, the environment still wasn't okay ('sane' is usually the word used.)
Java is pretty bad when it comes to changin major versions (1.4->1.5)
Solution attempt- Install a real generation 1 jdk (1.4) as well as the current one (1.5)
Problem 4 - java 1.4 wanted parts of modular X, not a single-file X.
This is because modular is more up-to-date (it's the way forward)
Solution - We told it to ignore any X dependanies with the USE="-X".
This shouldn't be a problem, as your primary java install (1.5) *was* built against X.
In the long-term, you will eventually have to switch to modular-X. It's pretty easy, just follow the guide.
(Although more gentoo is probably the farthest thing from your mind atm... it can probably wait a few months ;)
What should happen: 'java-config-1 -L' - Should list the 1.4 jdk as the current one (have a * instead of a number)
'java-config-2 -L' - Should list both the 1.4 and the 1.5 jdk, the 1.5 one should be current.
java-check-environment will verify that you have both a gen-1 and a gen-2 jdk installed.
Potential problem: java-check-environment complains about PROVIDE files.
Solution: Delete the file it names (this is the 'virtual' we installed earlier)
Run java-check-environment again.
-> emerge -av azureus
Happy days!
Hope that's cleared it up a bit - I'm off for the night. Good luck!
(Oh, and RPM's are the devil. )