And be careful about that entry name. There may be many entries for the args parameter, on for each version of java installed.

Here is my file for example:
#deployment.properties
#Mon Sep 27 01:46:42 BST 2010
deployment.javaws.splash.index=D\:\\Java\\Cache\\6.0\\splash\\splash.xml
deployment.version=6.0
deployment.console.startup.mode=SHOW
deployment.user.cachedir=D\:\\Java\\Cache
deployment.javaws.viewer.bounds=0,0,1142,603
deployment.browser.path=C\:\\Program Files\\Internet Explorer\\iexplore.exe
#Java Deployment jre's
#Mon Sep 27 01:46:44 BST 2010
deployment.javaws.jre.2.location=http\://java.sun.com/products/autodl/j2se
deployment.javaws.jre.1.registered=true
deployment.javaws.jre.0.product=1.6.0_20
deployment.javaws.jre.4.platform=1.5
deployment.javaws.jre.3.registered=true
deployment.javaws.jre.0.path=C\:\\Program Files\\Java\\jre6\\bin\\javaw.exe
deployment.javaws.jre.2.path=C\:\\Program Files\\Java\\jre1.6.0_07\\bin\\javaw.exe
deployment.javaws.jre.3.location=http\://java.sun.com/products/autodl/j2se
deployment.javaws.jre.2.args=-Xmx320M
deployment.javaws.jre.4.args=-Xmx320M
deployment.javaws.jre.4.path=C\:\\Program Files\\Java\\jre1.5.0_14\\bin\\javaw.exe
deployment.javaws.jre.0.platform=1.6
deployment.javaws.jre.4.enabled=true
deployment.javaws.jre.3.product=1.6.0_06
deployment.javaws.jre.0.osarch=x86
deployment.javaws.jre.2.enabled=true
deployment.javaws.jre.4.location=http\://java.sun.com/products/autodl/j2se
deployment.javaws.jre.0.osname=Windows
deployment.javaws.jre.1.osarch=x86
deployment.javaws.jre.1.platform=1.6
deployment.javaws.jre.0.registered=true
deployment.javaws.jre.1.product=1.6.0_13
deployment.javaws.jre.1.osname=Windows
deployment.javaws.jre.2.osarch=x86
deployment.javaws.jre.0.enabled=true
deployment.javaws.jre.2.registered=true
deployment.javaws.jre.0.location=http\://java.sun.com/products/autodl/j2se
deployment.javaws.jre.3.osarch=x86
deployment.javaws.jre.2.osname=Windows
deployment.javaws.jre.4.registered=true
deployment.javaws.jre.3.osname=Windows
deployment.javaws.jre.4.osarch=x86
deployment.javaws.jre.2.platform=1.6
deployment.javaws.jre.1.path=C\:\\Program Files\\Java\\jre1.6.0_13\\bin\\javaw.exe
deployment.javaws.jre.3.path=C\:\\Program Files\\Java\\jre1.6.0_06\\bin\\javaw.exe
deployment.javaws.jre.3.args=-Xmx320M
deployment.javaws.jre.4.osname=Windows
deployment.javaws.jre.4.product=1.5.0_14
deployment.javaws.jre.1.location=http\://java.sun.com/products/autodl/j2se
deployment.javaws.jre.3.enabled=false
deployment.javaws.jre.3.platform=1.6
deployment.javaws.jre.2.product=1.6.0_07
deployment.javaws.jre.1.enabled=true