java auto-update check, causes browser to not repaint

Steps to reproduce:

1. Install 5.0u6 offline with /v"JAVAUPDATE=0 AUTOUPDATECHECK=1"
2. Launch IE with an applet http://j2se.east/~billyh/applet.html
3. When it asks you if you want Java Update, ignore that dialog and drag anything else in front of the browser
4. Browser will not repaint until Java Update question is answered.

Expected Behavior:
Browser should repaint regardless of whether customer answers Java Update question.