FULL PRODUCT VERSION :
java version "1.5.0_06"
Java(TM) 2 Runtime Environment, Standard Edition (build 1.5.0_06-b05)
Java HotSpot(TM) Client VM (build 1.5.0_06-b05, mixed mode, sharing)

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

A DESCRIPTION OF THE PROBLEM :
If an applet is on a password protected page (basic authentication) you have to enter the credentials twice, first for IE then for JRE.

This bug is new in 1.5.0_06, Version 1.5.0_05 works fine.

This bug is in IE only, not in Firefox.

STEPS TO FOLLOW TO REPRODUCE THE PROBLEM :
Put any html page with applet (e.g. the SwingSet2 demo) on a password protected web space (tested with IIS 5.1), basic authentication enabled.

Open page in IE.

EXPECTED VERSUS ACTUAL BEHAVIOR :
EXPECTED -
One authentication window from IE. Applet then loading without further questions.
ACTUAL -
First authentication window from IE, then authentication window from JRE.

REPRODUCIBILITY :
This bug can be reproduced always.

Release Regression From : 5.0u5
The above release value was the last known release where this 
bug was known to work. Since then there has been a regression.