FULL PRODUCT VERSION :
Java Web Start 10.40.2.43
Using JRE version 1.7.0_40-b43 Java HotSpot(TM) Client VM

ADDITIONAL OS VERSION INFORMATION :
Microsoft Windows XP [Version 5.1.2600]

A DESCRIPTION OF THE PROBLEM :
My application was running fine until i upgraded my jre to 7u40. When my application is initializing its doing Logger.getLogger("ClassName"), i am getting following exception.

java.lang.ExceptionInInitializerError
    at java.util.logging.Logger.demandLogger(Unknown Source)
    at java.util.logging.Logger.getLogger(Unknown Source)
    at com.company.Application.Applet.<clinit>(Unknown Source)
    at sun.reflect.NativeMethodAccessorImpl.invoke0(Native Method)
    at sun.reflect.NativeMethodAccessorImpl.invoke(Unknown Source)
    at sun.reflect.DelegatingMethodAccessorImpl.invoke(Unknown Source)
    at java.lang.reflect.Method.invoke(Unknown Source)
    at com.sun.javaws.Launcher.executeApplication(Unknown Source)
    at com.sun.javaws.Launcher.executeMainClass(Unknown Source)
    at com.sun.javaws.Launcher.doLaunchApp(Unknown Source)
    at com.sun.javaws.Launcher.run(Unknown Source)
    at java.lang.Thread.run(Unknown Source)

Caused by: java.lang.NullPointerException
    at java.util.logging.Logger.setParent(Unknown Source)
    at java.util.logging.LogManager$6.run(Unknown Source)
    at java.security.AccessController.doPrivileged(Native Method)
    at java.util.logging.LogManager.doSetParent(Unknown Source)
    at java.util.logging.LogManager.access$1100(Unknown Source)
    at java.util.logging.LogManager$LogNode.walkAndSetParent(Unknown Source)
    at java.util.logging.LogManager$LoggerContext.addLocalLogger(Unknown Source)
    at java.util.logging.LogManager$LoggerContext.addLocalLogger(Unknown Source)
    at java.util.logging.LogManager.addLogger(Unknown Source)
    at java.util.logging.LogManager$1.run(Unknown Source)
    at java.security.AccessController.doPrivileged(Native Method)
    at java.util.logging.LogManager.<clinit>(Unknown Source)

The exception is coming from this line

private static Logger logger = Logger.getLogger(Applet.class.getName());

Could it be because of any sideeffects with fix http://bugs.sun.com/bugdatabase/view_bug.do?bug_id=8017174 ?

Workaround is to open java control center and enable logging. This is a concern since by default "Enable Logging" is unchecked. If i select "Enable Logging", application starts fine

REGRESSION. Last worked in version 7u25

STEPS TO FOLLOW TO REPRODUCE THE PROBLEM :
1) Launch java control center and unselect "Enable Logging" from advanced tab
2) Create a sample westart application which initialize logging
private static Logger logger = Logger.getLogger(Applet.class.getName());
3) Application is not launching
4) If you enable "Enable Logging", application launches

EXPECTED VERSUS ACTUAL BEHAVIOR :
EXPECTED -
Should launch always irrespective of the "Enable Logging" checkbox.
ACTUAL -
Application fails with a nullpointer exception.

ERROR MESSAGES/STACK TRACES THAT OCCUR :
java.lang.ExceptionInInitializerError
    at java.util.logging.Logger.demandLogger(Unknown Source)
    at java.util.logging.Logger.getLogger(Unknown Source)
    at com.company.Application.Applet.<clinit>(Unknown Source)
    at sun.reflect.NativeMethodAccessorImpl.invoke0(Native Method)
    at sun.reflect.NativeMethodAccessorImpl.invoke(Unknown Source)
    at sun.reflect.DelegatingMethodAccessorImpl.invoke(Unknown Source)
    at java.lang.reflect.Method.invoke(Unknown Source)
    at com.sun.javaws.Launcher.executeApplication(Unknown Source)
    at com.sun.javaws.Launcher.executeMainClass(Unknown Source)
    at com.sun.javaws.Launcher.doLaunchApp(Unknown Source)
    at com.sun.javaws.Launcher.run(Unknown Source)
    at java.lang.Thread.run(Unknown Source)

Caused by: java.lang.NullPointerException
    at java.util.logging.Logger.setParent(Unknown Source)
    at java.util.logging.LogManager$6.run(Unknown Source)
    at java.security.AccessController.doPrivileged(Native Method)
    at java.util.logging.LogManager.doSetParent(Unknown Source)
    at java.util.logging.LogManager.access$1100(Unknown Source)
    at java.util.logging.LogManager$LogNode.walkAndSetParent(Unknown Source)
    at java.util.logging.LogManager$LoggerContext.addLocalLogger(Unknown Source)
    at java.util.logging.LogManager$LoggerContext.addLocalLogger(Unknown Source)
    at java.util.logging.LogManager.addLogger(Unknown Source)
    at java.util.logging.LogManager$1.run(Unknown Source)
    at java.security.AccessController.doPrivileged(Native Method)
    at java.util.logging.LogManager.<clinit>(Unknown Source)

REPRODUCIBILITY :
This bug can be reproduced always.

---------- BEGIN SOURCE ----------
a simple logging enabled applet
---------- END SOURCE ----------

CUSTOMER SUBMITTED WORKAROUND :
Select "Enable Logging"