I ran into this tonight and was not able to find any answers that fully assisted me. During install, I was presented with a dialog that said there were programs using java (jp2launcher.exe) that needed to close before installation could continue. Upon clicking close and continue installation, I would receive error 1603 and the install failed. Through other posts, I found a workaround that worked.
Navigate to C:\Program Files (x86)\Java\jre8u25 (or whatever version you're on)
Open the folder labeled "bin."
Open javacpl.exe
Go to the security tab, un-check "Enable Java content in the browser."
Run the java installer again
After installation, go back to javacpl.exe, security tab, and re-check "Enable Java content in the browser."
Hope this helps someone.
Edit on 4/23/15:
I ran into another issue tonight, this time with u45 on a fresh install of Win 7 pro. There was no mention of jp2launcher.exe this time, just that the Java update failed with error 1603. I had to find my post on the forums here to remember the fix for this. The fix mentioned above worked in this instance as well.
Very frustrating.