The crash report is shown here:

---- Minecraft Crash Report ----

Time: 7/23/13 4:54 AM
Description: Exception in server tick loop

java.lang.OutOfMemoryError
	at java.util.zip.Inflater.inflateBytes(Native Method)
	at java.util.zip.Inflater.inflate(Unknown Source)
	at java.util.zip.InflaterInputStream.read(Unknown Source)
	at java.io.BufferedInputStream.fill(Unknown Source)
	at java.io.BufferedInputStream.read(Unknown Source)
	at java.io.DataInputStream.readByte(Unknown Source)
	at ck.b(SourceFile:93)
	at ck.a(SourceFile:89)
	at ch.a(SourceFile:75)
	at aed.a(SourceFile:55)
	at jq.f(SourceFile:127)
	at jq.c(SourceFile:78)
	at jp.<init>(SourceFile:29)
	at jo.a(SourceFile:208)
	at jo.a(SourceFile:240)
	at hm.a(SourceFile:141)
	at hm.c(SourceFile:188)
	at hm.a(SourceFile:85)
	at bkz.b(SourceFile:73)
	at net.minecraft.server.MinecraftServer.t(SourceFile:488)
	at net.minecraft.server.MinecraftServer.s(SourceFile:405)
	at bkw.s(SourceFile:124)
	at net.minecraft.server.MinecraftServer.run(SourceFile:339)
	at hh.run(SourceFile:582)


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

-- System Details --
Details:
	Minecraft Version: 1.6.2
	Operating System: Windows 8 (x86) version 6.2
	Java Version: 1.7.0_25, Oracle Corporation
	Java VM Version: Java HotSpot(TM) Client VM (mixed mode), Oracle Corporation
	Memory: 181442640 bytes (173 MB) / 500903936 bytes (477 MB) up to 1037959168 bytes (989 MB)
	JVM Flags: 1 total; -Xmx1G
	AABB Pool Size: 629 (35224 bytes; 0 MB) allocated, 628 (35168 bytes; 0 MB) used
	Suspicious classes: ~~ERROR~~ OutOfMemoryError: null
	IntCache: cache: 0, tcache: 0, allocated: 3, tallocated: 63
	Profiler Position: N/A (disabled)
	Vec3 Pool Size: 72 (4032 bytes; 0 MB) allocated, 72 (4032 bytes; 0 MB) used
	Player Count: 1 / 8; [ju['al33444'/31058, l='New World', x=86.70, y=71.00, z=-335.30]]
	Type: Integrated Server (map_client.txt)
	Is Modded: Probably not. Jar signature remains and both client + server brands are untouched.