I have a 2-year time frame to learn and can devote about 90 minutes each day to this study. I hope to complete the SCJP in 2 years. Do you think this a realistic goal? Is SCJD more like a 5-year objective?

What should I use to learn? I'm starting with the book "How to Think Like a Computer Scientist: Java." What next? Other books? A series? The CD-ROM from Sun? Any good OCW explaining Java? Should I pay for On-line classes? Does that matter if the resources are for JAVA 1.5?

What should I use to practice? Work exercises from a book? Make many small applications on my own? Spend a long time on one large piece of software? Join an already existing open source project?

No way anyone here can answer this. 2 years might be ample time for some, and 5 not enough for others. We don't know you, how quick you learn, what your existing experience is, etc., so there's no way of giving an answer to this question.
Short answer: yes.

Longer answer: learn with what YOU are comfortable with. Whatever gets you going more quickly, and what you learn easiest, is the way to go. Go to your library, check out books. If you find one that works for you, buy it, and use it as a reference. For me, I get more from books and self-directed study, than I do from an online course, but again, everyone is different. I learn better by having a task, then figuring out how to accomplish it. Some folks need to be shown how to do it, rather than figuring it out. I'd get open source code, and look at how they're doing things...figure out each part, what it does, and how it does it. Then apply that knowledge to what YOU want to write....go from there.

This is the core of the problem regardless of the language. Sometimes one needs 10 minutes, sometimes, say, 3 hours, i.e. "I'm in the middle of something" exists for a reason.