Tested JDK7 build: b144
Os tested: winxp and win7

Jaws application requesting JRE from 1.3 family fails to run with jdk7 installed on the machine. Following exception is getting thrown while launching the application.

JNLPException[category: Launch File Error : Exception: null : LaunchDesc:
<jnlp spec="0.2 1.0" codebase="http://javaweb.sfbay.sun.com/~ngthomas/draw/" href="http://javaweb.sfbay.sun.com/~ngthomas/draw/draw_13.jnlp">
  <information>
    <title>Draw 1.3*</title>
    <vendor>Sun</vendor>
    <homepage href="http://java.sun.com/products/javawebstart/demos.html"/>
    <description>A minimalist drawing application along the lines of Illustrator</description>
    <description kind="short">Draw Demo Short Description</description>
    <icon href="http://javaweb.sfbay.sun.com/~ngthomas/draw/images/draw.jpg" kind="default"/>
    <offline-allowed/>
  </information>
  <update check="timeout" policy="always"/>
  <resources>
    <java href="http://java.sun.com/products/autodl/j2se" version="1.3*">
      <jnlp spec="1.0+" codebase="http://javadl.sun.com/webapps/jawsautodl/AutoDL/j2se/">
        <information>
          <title>J2RE 1.3.1_18 Installer</title>
          <vendor>Sun Microsystems, Inc.</vendor>
          <homepage href="null"/>
        </information>
        <security>
          <all-permissions/>
        </security>
        <update check="timeout" policy="always"/>
        <resources>
          <java href="http://java.sun.com/products/autodl/j2se" version="1.3+"/>
          <jar href="http://javadl.sun.com/webapps/jawsautodl/AutoDL/j2se/javaws-j2re-inst-w.jar" download="eager" main="false"/>
          <property name="installerLocation" value="j2re-1_3_1_18-windows-i586.exe"/>
          <property name="installerSize" value="5509936"/>
          <property name="javaVersion" value="1.3.1_18"/>
          <property name="platformVersion" value="1.3"/>
          <property name="msvcrt.versionMS" value="60000"/>
          <property name="msvcrt.versionLS" value="20910000"/>
          <property name="osplatform" value="windows-i586"/>
        </resources>
        <installer-desc main-class="com.sun.webstart.installers.Main"/>
      </jnlp>
    </java>
    <jar href="http://javaweb.sfbay.sun.com/~ngthomas/draw/draw.jar" download="eager" main="true"/>
  </resources>
  <application-desc main-class="Draw"/>
</jnlp> ]
at com.sun.javaws.Launcher.prepareResources(Unknown Source)
at com.sun.javaws.Launcher.prepareAllResources(Unknown Source)
at com.sun.javaws.Launcher.prepareToLaunch(Unknown Source)
at com.sun.javaws.Launcher.prepareToLaunch(Unknown Source)
at com.sun.javaws.Launcher.launch(Unknown Source)
at com.sun.javaws.Main.launchApp(Unknown Source)
at com.sun.javaws.Main.continueInSecureThread(Unknown Source)
at com.sun.javaws.Main$1.run(Unknown Source)
at java.lang.Thread.run(Unknown Source)