SUGGESTED FIX

the core part of the fix is :
+++ XEmbeddedFramePeer.java        2007-02-13 18:25:17.000000000 +0300
@@ -5,23 +5,24 @@
  * SUN PROPRIETARY/CONFIDENTIAL. Use is subject to license terms.
  */
 
 package sun.awt.X11;
 
-import sun.awt.EmbeddedFrame;
-import sun.awt.X11.XEmbeddedFrame;
-import java.awt.peer.ComponentPeer;
 import java.awt.*;
-import java.awt.event.ComponentEvent;
-import java.util.logging.*;
-import java.awt.AWTKeyStroke;
+
 import java.util.LinkedList;
 import java.util.Iterator;
 
+import java.util.logging.Level;
+import java.util.logging.Logger;
+
+import sun.awt.EmbeddedFrame;
+import sun.awt.SunToolkit;
+
 public class XEmbeddedFramePeer extends XFramePeer {
 
-    private static final Logger xembedLog = Logger.getLogger("sun.awt.X11.xembed");
+    private static final Logger xembedLog = Logger.getLogger("sun.awt.X11.xembed.XEmbeddedFramePeer");
 
     LinkedList<AWTKeyStroke> strokes;
 
     XEmbedClientHelper embedder; // Caution - can be null if XEmbed is not supported
     public XEmbeddedFramePeer(EmbeddedFrame target) {
@@ -109,37 +110,41 @@
         return super.isEventDisabled(e);
     }
 
     public void handleConfigureNotifyEvent(XEvent xev)
     {
+        assert (SunToolkit.isAWTLockHeldByCurrentThread());
+        XConfigureEvent xe = xev.get_xconfigure();
+        if (xembedLog.isLoggable(Level.FINE)) {
+            xembedLog.fine(xe.toString());
+        }
+        
         // fix for 5063031
         // if we use super.handleConfigureNotifyEvent() we would get wrong
-        //   size and position because embedded frame really is NOT a decorated one
-
-        XConfigureEvent xe = xev.get_xconfigure();
-
+        // size and position because embedded frame really is NOT a decorated one
         checkIfOnNewScreen(toGlobal(new Rectangle(xe.get_x(),
-                                                  xe.get_y(),  
-                                                  xe.get_width(),  
-                                                  xe.get_height())));
-
-
+                xe.get_y(),
+                xe.get_width(),
+                xe.get_height())));
+        
         Rectangle oldBounds = getBounds();
-
-        x = xe.get_x();
-        y = xe.get_y();
-        width = xe.get_width();
-        height = xe.get_height();
-
-        Rectangle bounds = getBounds();
-        if (!bounds.getSize().equals(oldBounds.getSize())) {
-            postEventToEventQueue(new ComponentEvent(getEventSource(), ComponentEvent.COMPONENT_RESIZED));
-        }
-        if (!bounds.getLocation().equals(oldBounds.getLocation())) {
-            postEventToEventQueue(new ComponentEvent(getEventSource(), ComponentEvent.COMPONENT_MOVED));
-        }  
-    }      
+        
+        synchronized (getStateLock()) {
+            x = xe.get_x();
+            y = xe.get_y();
+            width = xe.get_width();
+            height = xe.get_height();
+            
+            dimensions.setClientSize(width, height);
+            dimensions.setLocation(x, y);
+        }
+        
+        if (!getLocation().equals(oldBounds.getLocation())) {
+            handleMoved(dimensions);
+        }
+        reconfigureContentWindow(dimensions);
+    }
 
     protected void traverseOutForward() {
         if (embedder != null && embedder.isActive()) {
             if (embedder.isApplicationActive()) {  
                 xembedLog.fine("Traversing out Forward");

this could be used for backporting.
The full fix could be found at http://javaweb.sfbay/jcg/7/awt/6522374/ (and it is attached)
                                     

EVALUATION

the problem is that we do not reconfigure embedded frame's content window.
                                     

EVALUATION

to fix this I update dimentions of the embedded frame and call handleMoved() and
reconfigureContentWindow()