A DESCRIPTION OF THE FIX :
BasicListUI has a private class Handler which has a method propertyChange(PropertyChangeEvent e). In this method the propertyName is compared with the == operator. This is very bad style and can lead to strange problems (see attached testcases). In addition to that the property "cellRenderer" is checked twice.
The submitter created a patch against build 1.7.0-ea-b06:

-------------------
--- original/BasicListUI.java 2007-01-20 22:24:31.000000000 +0100
+++ BasicListUI.java 2007-01-20 22:28:14.000000000 +0100
@@ -2436,7 +2436,7 @@
             /* If the JList.model property changes, remove our listener,
              * listDataListener from the old model and add it to the new one.
              */
- if (propertyName == "model") {
+ if ("model".equals(propertyName)) {
                 ListModel oldModel = (ListModel)e.getOldValue();
                 ListModel newModel = (ListModel)e.getNewValue();
                 if (oldModel != null) {
@@ -2452,7 +2452,7 @@
             /* If the JList.selectionModel property changes, remove our listener,
              * listSelectionListener from the old selectionModel and add it to the new one.
              */
- else if (propertyName == "selectionModel") {
+ else if ("selectionModel".equals(propertyName)) {
                 ListSelectionModel oldModel = (ListSelectionModel)e.getOldValue();
                 ListSelectionModel newModel = (ListSelectionModel)e.getNewValue();
                 if (oldModel != null) {
@@ -2464,48 +2464,44 @@
                 updateLayoutStateNeeded |= modelChanged;
  redrawList();
             }
- else if (propertyName == "cellRenderer") {
+ else if ("cellRenderer".equals(propertyName)) {
                 updateLayoutStateNeeded |= cellRendererChanged;
  redrawList();
             }
- else if (propertyName == "font") {
+ else if ("font".equals(propertyName)) {
                 updateLayoutStateNeeded |= fontChanged;
  redrawList();
             }
- else if (propertyName == "prototypeCellValue") {
+ else if ("prototypeCellValue".equals(propertyName)) {
                 updateLayoutStateNeeded |= prototypeCellValueChanged;
  redrawList();
             }
- else if (propertyName == "fixedCellHeight") {
+ else if ("fixedCellHeight".equals(propertyName)) {
                 updateLayoutStateNeeded |= fixedCellHeightChanged;
  redrawList();
             }
- else if (propertyName == "fixedCellWidth") {
+ else if ("fixedCellWidth".equals(propertyName)) {
                 updateLayoutStateNeeded |= fixedCellWidthChanged;
  redrawList();
             }
- else if (propertyName == "cellRenderer") {
- updateLayoutStateNeeded |= cellRendererChanged;
- redrawList();
- }
- else if (propertyName == "selectionForeground") {
+ else if ("selectionForeground".equals(propertyName)) {
  list.repaint();
             }
- else if (propertyName == "selectionBackground") {
+ else if ("selectionBackground".equals(propertyName)) {
  list.repaint();
             }
- else if ("layoutOrientation" == propertyName) {
+ else if ("layoutOrientation".equals(propertyName)) {
                 updateLayoutStateNeeded |= layoutOrientationChanged;
                 layoutOrientation = list.getLayoutOrientation();
                 redrawList();
             }
- else if ("visibleRowCount" == propertyName) {
+ else if ("visibleRowCount".equals(propertyName)) {
                 if (layoutOrientation != JList.VERTICAL) {
                     updateLayoutStateNeeded |= layoutOrientationChanged;
                     redrawList();
                 }
             }
- else if ("componentOrientation" == propertyName) {
+ else if ("componentOrientation".equals(propertyName)) {
  isLeftToRight = list.getComponentOrientation().isLeftToRight();
                 updateLayoutStateNeeded |= componentOrientationChanged;
                 redrawList();
@@ -2513,10 +2509,10 @@
  InputMap inputMap = getInputMap(JComponent.WHEN_FOCUSED);
  SwingUtilities.replaceUIInputMap(list, JComponent.WHEN_FOCUSED,
  inputMap);
- } else if ("List.isFileList" == propertyName) {
+ } else if ("List.isFileList".equals(propertyName)) {
  updateIsFileList();
  redrawList();
- } else if ("dropLocation" == propertyName) {
+ } else if ("dropLocation".equals(propertyName)) {
                 JList.DropLocation oldValue = (JList.DropLocation)e.getOldValue();
                 repaintDropLocation(oldValue);
                 repaintDropLocation(list.getDropLocation());
-------------------

JUnit TESTCASE :
Here is a testcase that verifies the problem:
-------------------
import java.beans.PropertyChangeEvent;
import java.beans.PropertyChangeListener;
import java.lang.reflect.Field;
import java.lang.reflect.Method;
import javax.swing.JList;
import javax.swing.plaf.basic.BasicListUI;
import junit.framework.TestCase;

/**
 *
 * @author ###@###.###
 */
public class BasicListUITest extends TestCase {
    
    public void testBasicListUI() {
        try {
            JList list = new JList();
            BasicListUI basicListUI = (BasicListUI) list.getUI();
            
            // get updateLayoutStateNeeded
            Field ulsnField = BasicListUI.class.getDeclaredField("updateLayoutStateNeeded");
            ulsnField.setAccessible(true);
            int ulsnBefore = ulsnField.getInt(basicListUI);
            
            // get handler
            Method getHandlerMethod =
                    BasicListUI.class.getDeclaredMethod("getHandler");
            getHandlerMethod.setAccessible(true);
            PropertyChangeListener propertyChangeListener =
                    (PropertyChangeListener) getHandlerMethod.invoke(basicListUI);
            propertyChangeListener.propertyChange(
                    new PropertyChangeEvent(this, "model", null, null));
            
            // check updateLayoutStateNeeded again
            int ulsnAfter = ulsnField.getInt(basicListUI);
            assertFalse("The field \"updateLayoutStateNeeded\" was unchanged after property changes!",
                    ulsnBefore == ulsnAfter);
            
        } catch (Exception ex) {
            ex.printStackTrace();
        }
    }
}
-------------------



Here is an example program that shows the problem in a real example without the reflection magic used in the JUnit test. I subclassed JList and suddenly setModel() stops working!
-------------------
import javax.swing.*;

/**
 * @author ###@###.###
 */
public class Test extends JFrame {
    
    private JList jList1;
    private JScrollPane jScrollPane1;
    
    public Test() {
        initComponents();
        DefaultListModel listModel = new DefaultListModel();
        listModel.addElement("test");
        jList1.setModel(listModel);
    }
    
    private void initComponents() {
        jScrollPane1 = new JScrollPane();
        jList1 = new MyJList();

        setDefaultCloseOperation(WindowConstants.EXIT_ON_CLOSE);
        jScrollPane1.setViewportView(jList1);

        GroupLayout layout = new GroupLayout(getContentPane());
        getContentPane().setLayout(layout);
        layout.setHorizontalGroup(
            layout.createParallelGroup(GroupLayout.Alignment.LEADING)
            .addGroup(layout.createSequentialGroup()
                .addContainerGap()
                .addComponent(jScrollPane1, GroupLayout.DEFAULT_SIZE, 376, Short.MAX_VALUE)
                .addContainerGap())
        );
        layout.setVerticalGroup(
            layout.createParallelGroup(GroupLayout.Alignment.LEADING)
            .addGroup(layout.createSequentialGroup()
                .addContainerGap()
                .addComponent(jScrollPane1, GroupLayout.DEFAULT_SIZE, 276, Short.MAX_VALUE)
                .addContainerGap())
        );
        pack();
    }
    
    public static void main(String args[]) {
        java.awt.EventQueue.invokeLater(new Runnable() {
            public void run() {
                new Test().setVisible(true);
            }
        });
    }
    
    private class MyJList extends JList {
        
        public void setModel(ListModel model) {
            if (model == null) {
                throw new IllegalArgumentException("model must be non null");
            }
            ListModel dataModel = getModel();
            ListModel oldValue = dataModel;
            dataModel = model;
            firePropertyChange("model", oldValue, dataModel);
            clearSelection();
        }
    }
}
-------------------