System.out.print("Enter the letter(t or z): ");
  B]letter = keyboard.next();[/B]


  if (letter == 't'||letter == 'T')
   {
     System.out.println("True");
   }

 else if (letter  == 'z'|| letter == 'Z') 
   {
    System.out.println("False");        }

Im getting an error here in bold, what is the problem??

What error are you getting? There is nothing wrong with the code you posted, the best way to debug is to show us all of the code because the problems are usually in a different place.