FULL PRODUCT VERSION :
java version "1.7.0_04"
Java(TM) SE Runtime Environment (build 1.7.0_04-b20)
Java HotSpot(TM) Client VM (build 23.0-b21, mixed mode, sharing)

ADDITIONAL OS VERSION INFORMATION :
Microsoft Windows [Version 6.1.7600]

EXTRA RELEVANT SYSTEM CONFIGURATION :
Test is done with Chrome. Same problem with IE 8

A DESCRIPTION OF THE PROBLEM :
1. This appears to be a regression problem
2. Applet runs on 1.5 and 1.6
3. After upgraded to 1.7 none of the browsers can load the same applet if it has not been already cached (i.e. the copy was cached by using java 1.6)

REGRESSION. Last worked in version 6u31

STEPS TO FOLLOW TO REPRODUCE THE PROBLEM :
1. Access the live system http://www.techlive.com
2. U have to create an account (free)
3. On the Dashboard, click on "Upload Files" under Repository at the lower right hand corner
4. An attempt will be made to launch a file upload applet using the Object/Imbed tag

EXPECTED VERSUS ACTUAL BEHAVIOR :
EXPECTED -
Applet should be successfully launched with java 1.6 and Java 1.7, cached or not cached.
ACTUAL -
Applet will only launch by Java 1.6, Once it is cached, Java 1.7 can also launch it.

If the applet is not cached, Java 7 will hang and will not download all the jar files.

In fact, any jar file with classes in it will NOT be download by java 7.

ERROR MESSAGES/STACK TRACES THAT OCCUR :
Java Plug-in 10.4.0.20
Using JRE version 1.7.0_04-b20 Java HotSpot(TM) Client VM
User home directory = C:\Users\Joe
----------------------------------------------------
c: clear console window
f: finalize objects on finalization queue
g: garbage collect
h: display this help message
l: dump classloader list
m: print memory usage
o: trigger logging
q: hide console
r: reload policy configuration
s: dump system and deployment properties
t: dump thread list
v: dump thread stack
x: clear classloader cache
0-5: set trace level to <n>
----------------------------------------------------
security: property package.access value sun.,com.sun.xml.internal.ws.,com.sun.xml.internal.bind.,com.sun.imageio.,com.sun.org.apache.xerces.internal.utils.,com.sun.org.apache.xalan.internal.utils.
security: property package.access new value sun.,com.sun.xml.internal.ws.,com.sun.xml.internal.bind.,com.sun.imageio.,com.sun.org.apache.xerces.internal.utils.,com.sun.org.apache.xalan.internal.utils.,com.sun.javaws
security: property package.access value sun.,com.sun.xml.internal.ws.,com.sun.xml.internal.bind.,com.sun.imageio.,com.sun.org.apache.xerces.internal.utils.,com.sun.org.apache.xalan.internal.utils.,com.sun.javaws
security: property package.access new value sun.,com.sun.xml.internal.ws.,com.sun.xml.internal.bind.,com.sun.imageio.,com.sun.org.apache.xerces.internal.utils.,com.sun.org.apache.xalan.internal.utils.,com.sun.javaws,com.sun.deploy
security: property package.access value sun.,com.sun.xml.internal.ws.,com.sun.xml.internal.bind.,com.sun.imageio.,com.sun.org.apache.xerces.internal.utils.,com.sun.org.apache.xalan.internal.utils.,com.sun.javaws,com.sun.deploy
security: property package.access new value sun.,com.sun.xml.internal.ws.,com.sun.xml.internal.bind.,com.sun.imageio.,com.sun.org.apache.xerces.internal.utils.,com.sun.org.apache.xalan.internal.utils.,com.sun.javaws,com.sun.deploy,com.sun.jnlp
security: property package.definition value null
security: property package.definition new value com.sun.javaws
security: property package.definition value com.sun.javaws
security: property package.definition new value com.sun.javaws,com.sun.deploy
security: property package.definition value com.sun.javaws,com.sun.deploy
security: property package.definition new value com.sun.javaws,com.sun.deploy,com.sun.jnlp
security: property package.access value sun.,com.sun.xml.internal.ws.,com.sun.xml.internal.bind.,com.sun.imageio.,com.sun.org.apache.xerces.internal.utils.,com.sun.org.apache.xalan.internal.utils.,com.sun.javaws,com.sun.deploy,com.sun.jnlp
security: property package.access new value sun.,com.sun.xml.internal.ws.,com.sun.xml.internal.bind.,com.sun.imageio.,com.sun.org.apache.xerces.internal.utils.,com.sun.org.apache.xalan.internal.utils.,com.sun.javaws,com.sun.deploy,com.sun.jnlp,org.mozilla.jss
security: property package.definition value com.sun.javaws,com.sun.deploy,com.sun.jnlp
security: property package.definition new value com.sun.javaws,com.sun.deploy,com.sun.jnlp,org.mozilla.jss
preloader: Construct preloader delegate
preloader: Setting default preloader and progress monitor for non JNLP applets
basic: Added progress listener: sun.plugin.util.ProgressMonitorAdapter@65ec20
preloader: Installing progress monitor true
basic: Plugin2ClassLoader.addURL parent called for http://www.techlive.com/apps/applet-lib/swing-worker-1.2.jar
basic: Plugin2ClassLoader.addURL parent called for http://www.techlive.com/apps/applet-lib/swing-layout-1.0.3.jar
basic: Plugin2ClassLoader.addURL parent called for http://www.techlive.com/apps/applet-lib/warroom-client-launcher.jar
basic: Plugin2ClassLoader.addURL parent called for http://www.techlive.com/apps/applet-lib/warroom-client.jar
basic: Plugin2ClassLoader.addURL parent called for http://www.techlive.com/apps/applet-lib/common.jar
basic: Plugin2ClassLoader.addURL parent called for http://www.techlive.com/apps/applet-lib/commons-httpclient-3.1.jar
basic: Plugin2ClassLoader.addURL parent called for http://www.techlive.com/apps/applet-lib/commons-logging-1.1.1.jar
basic: Plugin2ClassLoader.addURL parent called for http://www.techlive.com/apps/applet-lib/commons-codec.jar
basic: Plugin2ClassLoader.addURL parent called for http://www.techlive.com/apps/applet-lib/jyaml-1.3.jar
basic: Plugin2ClassLoader.addURL parent called for http://www.techlive.com/apps/applet-lib/json-java.jar
basic: Plugin2ClassLoader.addURL parent called for http://www.techlive.com/apps/applet-lib/jcifs-1.3.16.jar
basic: Plugin2ClassLoader.addURL parent called for http://www.techlive.com/apps/applet-lib/swing-worker-1.2.jar
basic: Plugin2ClassLoader.addURL parent called for http://www.techlive.com/apps/applet-lib/swing-layout-1.0.3.jar
basic: Plugin2ClassLoader.addURL parent called for http://www.techlive.com/apps/applet-lib/warroom-client-launcher.jar
basic: Plugin2ClassLoader.addURL parent called for http://www.techlive.com/apps/applet-lib/warroom-client.jar
basic: Plugin2ClassLoader.addURL parent called for http://www.techlive.com/apps/applet-lib/common.jar
basic: Plugin2ClassLoader.addURL parent called for http://www.techlive.com/apps/applet-lib/commons-httpclient-3.1.jar
basic: Plugin2ClassLoader.addURL parent called for http://www.techlive.com/apps/applet-lib/commons-logging-1.1.1.jar
basic: Plugin2ClassLoader.addURL parent called for http://www.techlive.com/apps/applet-lib/commons-codec.jar
basic: Plugin2ClassLoader.addURL parent called for http://www.techlive.com/apps/applet-lib/jyaml-1.3.jar
basic: Plugin2ClassLoader.addURL parent called for http://www.techlive.com/apps/applet-lib/json-java.jar
basic: Plugin2ClassLoader.addURL parent called for http://www.techlive.com/apps/applet-lib/jcifs-1.3.16.jar
preloader: Added pending event 1: AppletInitEvent[type=CallConstructor]
preloader: Using preloader class: null com.sun.deploy.uitoolkit.impl.awt.AWTAppletAdapter@130c132
preloader: Using default preloader
preloader: Requested to use preloader class: null
preloader: Delivering: AppletInitEvent[type=CallConstructor]
preloader: Skipped all (0) download events prior to null
preloader: Start progressCheck thread
preloader: GrayBox: parent = sun.plugin2.main.client.PluginEmbeddedFrame[frame0,0,0,1x1,layout=java.awt.BorderLayout,title=,resizable,normal]
network: Cache entry not found [url: http://www.techlive.com/apps/applet-lib/swing-worker-1.2.jar, version: null]
network: Connecting http://www.techlive.com/apps/applet-lib/swing-worker-1.2.jar with proxy=DIRECT
network: Connecting http://www.techlive.com:80/ with proxy=DIRECT
network: Connecting http://www.techlive.com/apps/applet-lib/swing-worker-1.2.jar with cookie "__utma=137678005.346938132.1300723587.1307217898.1307233931.32"
preloader: Delivering: DownloadEvent[type=load,loaded=17660, total=17660, percent=1]
network: Downloading resource: http://www.techlive.com/apps/applet-lib/swing-worker-1.2.jar
Content-Length: 17,660
Content-Encoding: null
network: Wrote URL http://www.techlive.com/apps/applet-lib/swing-worker-1.2.jar to File C:\Users\Joe\AppData\LocalLow\Sun\Java\Deployment\cache\6.0\27\4264dd9b-2a868237-temp
security: Blacklist revocation check is enabled
security: Trusted libraries list check is enabled
network: SyncFileAccess.openLock: handled OverlappingFileLockException, remainint TO : 10000
security: Accessing keys and certificate in Mozilla user profile: null
security: Loading Deployment certificates from C:\Users\Joe\AppData\LocalLow\Sun\Java\Deployment\security\trusted.certs
security: Loaded Deployment certificates from C:\Users\Joe\AppData\LocalLow\Sun\Java\Deployment\security\trusted.certs
security: Loading certificates from Deployment session certificate store
security: Loaded certificates from Deployment session certificate store
security: Validate the certificate chain using CertPath API
security: Loading Root CA certificates from C:\Program Files\Java\jre7\lib\security\cacerts
network: CleanupThread used 278365 us
security: Loaded Root CA certificates from C:\Program Files\Java\jre7\lib\security\cacerts
security: Obtain certificate collection in Root CA certificate store
security: Obtain certificate collection in Root CA certificate store
security: Obtain certificate collection in Root CA certificate store
security: Obtain certificate collection in Root CA certificate store
security: The certificate hasnt been expired, no need to check timestamping info
security: Found jurisdiction list file
security: Start checking trusted extension for this certificate
security: Start comparing to jurisdiction list with this certificate
security: The CRL support is disabled
security: The OCSP support is disabled
security: This OCSP End Entity validation is disabled
security: Checking if certificate is in Deployment denied certificate store
security: Checking if certificate is in Deployment permanent certificate store
basic: updateValidationResultsForApplet update
cache: Mark prevalidated: http://www.techlive.com/apps/applet-lib/swing-worker-1.2.jar true tm=1337061435754 cert=1346889599000
network: Cache entry not found [url: http://www.techlive.com/apps/applet-lib/swing-layout-1.0.3.jar, version: null]
network: Connecting http://www.techlive.com/apps/applet-lib/swing-layout-1.0.3.jar with proxy=DIRECT
network: Connecting http://www.techlive.com:80/ with proxy=DIRECT
network: Connecting http://www.techlive.com/apps/applet-lib/swing-layout-1.0.3.jar with cookie "__utma=137678005.346938132.1300723587.1307217898.1307233931.32"
preloader: Delivering: DownloadEvent[type=load,loaded=73542, total=123177, percent=3]
preloader: Delivering: DownloadEvent[type=load,loaded=123177, total=123177, percent=5]
network: Downloading resource: http://www.techlive.com/apps/applet-lib/swing-layout-1.0.3.jar
Content-Length: 123,177
Content-Encoding: null
network: CleanupThread used 6 us
network: Wrote URL http://www.techlive.com/apps/applet-lib/swing-layout-1.0.3.jar to File C:\Users\Joe\AppData\LocalLow\Sun\Java\Deployment\cache\6.0\53\4360a735-4a4b021f-temp
network: CleanupThread used 5 us
security: Validate the certificate chain using CertPath API
security: The certificate hasnt been expired, no need to check timestamping info
security: Found jurisdiction list file
security: Start checking trusted extension for this certificate
security: Start comparing to jurisdiction list with this certificate
security: The CRL support is disabled
security: The OCSP support is disabled
security: This OCSP End Entity validation is disabled
security: Checking if certificate is in Deployment denied certificate store
security: Checking if certificate is in Deployment permanent certificate store
basic: updateValidationResultsForApplet update
cache: Mark prevalidated: http://www.techlive.com/apps/applet-lib/swing-layout-1.0.3.jar true tm=1337061436178 cert=1346889599000
network: Cache entry not found [url: http://www.techlive.com/apps/applet-lib/warroom-client-launcher.jar, version: null]
network: Connecting http://www.techlive.com/apps/applet-lib/warroom-client-launcher.jar with proxy=DIRECT
network: Connecting http://www.techlive.com:80/ with proxy=DIRECT
network: Connecting http://www.techlive.com/apps/applet-lib/warroom-client-launcher.jar with cookie "__utma=137678005.346938132.1300723587.1307217898.1307233931.32"
preloader: Delivering: DownloadEvent[type=load,loaded=4180, total=4180, percent=9]
network: Downloading resource: http://www.techlive.com/apps/applet-lib/warroom-client-launcher.jar
Content-Length: 4,180
Content-Encoding: null
network: CleanupThread used 6 us
network: Wrote URL http://www.techlive.com/apps/applet-lib/warroom-client-launcher.jar to File C:\Users\Joe\AppData\LocalLow\Sun\Java\Deployment\cache\6.0\12\5afef00c-2926e912-temp
network: CleanupThread used 4 us
security: Validate the certificate chain using CertPath API
security: The certificate hasnt been expired, no need to check timestamping info
security: Found jurisdiction list file
security: Start checking trusted extension for this certificate
security: Start comparing to jurisdiction list with this certificate
security: The CRL support is disabled
security: The OCSP support is disabled
security: This OCSP End Entity validation is disabled
security: Checking if certificate is in Deployment denied certificate store
security: Checking if certificate is in Deployment permanent certificate store
basic: updateValidationResultsForApplet update
cache: Mark prevalidated: http://www.techlive.com/apps/applet-lib/warroom-client-launcher.jar true tm=1337061436342 cert=1346889599000
network: Cache entry not found [url: http://www.techlive.com/apps/applet-lib/warroom-client.jar, version: null]
network: Connecting http://www.techlive.com/apps/applet-lib/warroom-client.jar with proxy=DIRECT
network: Connecting http://www.techlive.com:80/ with proxy=DIRECT
network: Connecting http://www.techlive.com/apps/applet-lib/warroom-client.jar with cookie "__utma=137678005.346938132.1300723587.1307217898.1307233931.32"
preloader: Stop progressCheck thread


REPRODUCIBILITY :
This bug can be reproduced always.

SUPPORT :
YES