Solution Manager 7.1 still uses Java 4 since it is based on NetWeaver 7.02. However, it really matters what version of Java is running on your managed systems - Portal or PI for example. You can then decide which version of the agent to deploy onto Solution Manager based on that info. Again, you can install both versions, and it will be perfectly okay. Solution Manger will detect the version of Java during the Managed System Setup Wizard, and then deploy the appropriate version of the agent.
Regards,
Jason