On IE8 and firefox or mozilla browser, once user authenitcates the browser by entering the valid user/password inside the pop-up coming from the browser, then there is no authentication pop-up coming from Java. But in case of chrome Java is not honoring the authentication from browser as one can notice authentication pop-up coming from Java also once user is done with browser authentication
1) Basic Authentication
Load the following applet
http://mossad.sfbay.sun.com:8080/basicAuth/tests/Test.html
User name : jituB
Pass: jitu20

If you notice pop-up from Java then bug is reproduced
2) Digest Authentication
Load the following applet
http://mossad.sfbay.sun.com:8080/digestAuth/tests/Test.html
User name : jituD
Pass: jitu
If you notice pop-up from Java then bug is reproduced