As of 1st Feb 2013 Oracle have released Java 1.7.0 update 13 and this workaround is no longer necessary http://www.java.com

Java users on Mac OSX can no longer use the Java browser plugin in Safari due to a mistake in the plugin whitelist pushed out recently:
Open a terminal and type
more /System/Library/CoreServices/CoreTypes.bundle/Contents/Resources/XProtect.meta.plist
And you will see the following:
<?xml version="1.0" encoding="UTF-8"?>
<!DOCTYPE plist PUBLIC "-//Apple//DTD PLIST 1.0//EN" "http://www.apple.com/DTDs/PropertyList-1.0.dtd">
<plist version="1.0">
<dict>
       <key>JavaWebComponentVersionMinimum</key>
       <string>1.6.0_37-b06-435</string>
       <key>LastModification</key>
       <string>Thu, 31 Jan 2013 04:41:14 GMT</string>
       <key>PlugInBlacklist</key>
       <dict>
               <key>10</key>
               <dict>
                       <key>com.macromedia.Flash Player.plugin</key>
                       <dict>
                               <key>MinimumPlugInBundleVersion</key>
                               <string>11.3.300.271</string>
                       </dict>
                       <key>com.oracle.java.JavaAppletPlugin</key>
                       <dict>
                               <key>MinimumPlugInBundleVersion</key>
                               <string>1.7.11.22</string>
                       </dict>
               </dict>
       </dict>
       <key>Version</key>
       <integer>2028</integer>
</dict>
</plist>
Notice that the MinimumPlugInBundleVersion for com.oracle.java.JavaAppletPlugin is set to 1.7.11.22 but if you type java -version you will see
java version "1.7.0_11"
Java(TM) SE Runtime Environment (build 1.7.0_11-b21)
Java HotSpot(TM) 64-Bit Server VM (build 23.6-b04, mixed mode)
The b21 means build 21 is the released build of Java 7 update 11.
To fix your XProtect.meta.plist you can edit it from the Terminal using
sudo nano /System/Library/CoreServices/CoreTypes.bundle/Contents/Resources/XProtect.meta.plist
and change
<string>1.7.11.22</string>
to
<string>1.7.11.21</string>
To save your changes do Ctrl-O [Enter] Ctrl-X and then restart Safari.