Which version of Java does SBT use?

You can use eval at the sbt prompt with the appropriate system properties:

> eval System.getProperty("java.version")
[info] ans: String = 1.7.0_45
> eval System.getProperty("java.home")
[info] ans: String = /Library/Java/JavaVirtualMachines/jdk1.7.0_45.jdk/Contents/Home/jre

(The other answers are fine too, this is just another method.)