FULL PRODUCT VERSION :
Java(TM) SE Runtime Environment (build 1.7.0-ea-b131)
Java HotSpot(TM) 64-Bit Server VM (build 21.0-b02, mixed mode)

ADDITIONAL OS VERSION INFORMATION :
Linux lenny 2.6.31-14-generic #48-Ubuntu SMP Fri Oct 16 14:05:01 UTC 2009 x86_64 GNU/Linux

EXTRA RELEVANT SYSTEM CONFIGURATION :
firefox 3.5.5 64-bit

A DESCRIPTION OF THE PROBLEM :
when trying to open a HTTPS connection from an applet a security exception is thrown: the file "<home>/.java/deployment/CacheUpgrade.properties" cannot be read. Actually this file does not exist.
After deleting the folder ".java", it will be recreated on the next plugin invocation but this time the file "CacheUpgrade.properties" will exist and applets will work as usual.

REGRESSION. Last worked in version 6

STEPS TO FOLLOW TO REPRODUCE THE PROBLEM :
use old settings from JRE 6 and view an applet in the plugin inside the browser which opens a HTTPS connection

EXPECTED VERSUS ACTUAL BEHAVIOR :
EXPECTED -
connection should be established
ACTUAL -
exception is thrown

ERROR MESSAGES/STACK TRACES THAT OCCUR :
java.security.AccessControlException: access denied ("java.io.FilePermission" "/home/markus/.java/deployment/CacheUpgrade.properties" "read")
at java.security.AccessControlContext.checkPermission(AccessControlContext.java:345)
at java.security.AccessController.checkPermission(AccessController.java:555)
at java.lang.SecurityManager.checkPermission(SecurityManager.java:549)
at java.lang.SecurityManager.checkRead(SecurityManager.java:888)
at java.io.FileInputStream.<init>(FileInputStream.java:131)
at com.sun.deploy.config.Platform.getCacheUpgradeProperties(Unknown Source)
at com.sun.deploy.config.Platform.getCacheUpgradeInfo(Unknown Source)
at com.sun.deploy.cache.UpgradeStatus.beenInitialized(Unknown Source)
at com.sun.deploy.cache.CacheUpgrader.getInstance(Unknown Source)
at com.sun.deploy.cache.Cache.getCacheEntry(Unknown Source)
at com.sun.deploy.cache.Cache.getCacheEntry(Unknown Source)
at com.sun.deploy.net.DownloadEngine.isUpdateAvailable(Unknown Source)
at com.sun.deploy.cache.DeployCacheHandler.get(Unknown Source)
at sun.net.www.protocol.http.HttpURLConnection.plainConnect(HttpURLConnection.java:873)
at sun.net.www.protocol.https.AbstractDelegateHttpsURLConnection.connect(AbstractDelegateHttpsURLConnection.java:177)
at sun.net.www.protocol.https.HttpsURLConnectionImpl.connect(HttpsURLConnectionImpl.java:153)
at net.mumie.srv.client.MmsrvClient.request(MmsrvClient.java:487)
at net.mumie.srv.client.MmsrvClient.get(MmsrvClient.java:545)
at net.mumie.srv.client.MmsrvClient.get(MmsrvClient.java:573)
at net.mumie.mathletfactory.util.exercise.MumieExercise.sendRequest(Unknown Source)
at net.mumie.mathletfactory.util.exercise.MumieExercise.createDownloadConnection(Unknown Source)
at net.mumie.mathletfactory.util.exercise.MumieExercise.loadRemoteQuestionSheet(Unknown Source)
at net.mumie.mathletfactory.util.exercise.MumieExercise.loadQuestionSheet(Unknown Source)
at net.mumie.mathletfactory.util.exercise.MumieExercise.initializeQuestionSheet(Unknown Source)
at net.mumie.mathletfactory.util.exercise.MumieExercise.setMathletContext(Unknown Source)
at net.mumie.mathletfactory.util.exercise.MumieExercise.<init>(Unknown Source)
at net.mumie.mathletfactory.util.exercise.mc.MCAppletExercise.<init>(Unknown Source)
at net.mumie.mathletfactory.util.exercise.mc.MCProblemCard.<init>(Unknown Source)
at com.il.omb.OMBProblemApplet.addCards(Unknown Source)
at net.mumie.mathletfactory.appletskeleton.CardMathlet.init(Unknown Source)
at com.sun.deploy.uitoolkit.impl.awt.AWTAppletAdapter.init(Unknown Source)
at sun.plugin2.applet.Plugin2Manager$AppletExecutionRunnable.run(Unknown Source)
at java.lang.Thread.run(Thread.java:732)


REPRODUCIBILITY :
This bug can be reproduced always.

---------- BEGIN SOURCE ----------
I backuped my old java settings from the ".java" folder which "broke" the applet.
if necessary I could make them available.
---------- END SOURCE ----------

CUSTOMER SUBMITTED WORKAROUND :
delete the folder ".java" from the user's home directory