[MC-18566] Minecraft has stopped running because it encountered a problem; Ticking memory connection

Hello,

I recently purchased this for my son, and we are having trouble with the following issue:

"Minecraft has stopped running because it encountered a problem; Ticking memory connection."

Since it said to include the information recorded in the report, here it is:

---- Minecraft Crash Report ----
// I'm sorry, Dave.

Time: 6/20/13 12:32 PM
Description: Exception in server tick loop

java.lang.NullPointerException
	at org.lwjgl.opengl.GL11.glGenTextures(GL11.java:1383)
	at avc.a(SourceFile:23)
	at bge.a(RenderEngine.java:215)
	at axi.<init>(SourceFile:26)
	at bfx.<init>(ItemRenderer.java:30)
	at bfq.<init>(EntityRenderer.java:163)
	at EntityRendererProxy.<init>(EntityRendererProxy.java:11)
	at ModLoader.init(ModLoader.java:615)
	at ModLoader.populateChunk(ModLoader.java:1056)
	at iy.a(ChunkProviderServer.java:234)
	at abw.a(Chunk.java:1138)
	at iy.c(ChunkProviderServer.java:128)
	at ix.<init>(SourceFile:26)
	at iw.a(SourceFile:172)
	at iw.a(SourceFile:203)
	at gu.a(SourceFile:138)
	at gu.c(SourceFile:185)
	at gu.a(SourceFile:82)
	at bjj.b(SourceFile:73)
	at net.minecraft.server.MinecraftServer.r(SourceFile:480)
	at net.minecraft.server.MinecraftServer.q(SourceFile:397)
	at bjg.q(IntegratedServer.java:125)
	at net.minecraft.server.MinecraftServer.run(SourceFile:331)
	at gp.run(SourceFile:573)


A detailed walkthrough of the error, its code path and all known details is as follows:
---------------------------------------------------------------------------------------

-- System Details --
Details:
	Minecraft Version: 1.5.2
	Operating System: Windows XP (x86) version 5.1
	Java Version: 1.7.0_21, Oracle Corporation
	Java VM Version: Java HotSpot(TM) Client VM (mixed mode, sharing), Oracle Corporation
	Memory: 352929984 bytes (336 MB) / 518979584 bytes (494 MB) up to 518979584 bytes (494 MB)
	JVM Flags: 2 total; -Xms512m -Xmx512m
	AABB Pool Size: 2077 (116312 bytes; 0 MB) allocated, 1956 (109536 bytes; 0 MB) used
	Suspicious classes: ssEntityPlayer, ItemShiftingRod, ItemShiftingAbilityRod, ...]
	IntCache: cache: 0, tcache: 0, allocated: 1, tallocated: 63
	ModLoader: Mods loaded: 1
ModLoader 1.5.2

	Profiler Position: N/A (disabled)
	Vec3 Pool Size: 244 (13664 bytes; 0 MB) allocated, 227 (12712 bytes; 0 MB) used
	Player Count: 1 / 8; [jc['SIRTYLERTRON'/163, l='mansion', x=-32.96, y=64.00, z=-97.07]]
	Type: Integrated Server (map_client.txt)
	Is Modded: Very likely; Jar signature invalidated

We recently added a couple of extra mods into to the database:

1.) Mod-Loader
2.) All-U-Want Inventory
3.) Optifine

We also added "Shape Shifter", and updated our version of Java to Java 7. Could you please help us fix this dilemma? I attempted to Google search a solution to this epidemic, but have not been able to find a complete answer.

Thanks!