"Next-generation Java Plug-in" does not seem to care about system level 
deployment.config file.

The issue is strictly reproducible.

1. How to reproduce the problem
-------------------------------
1.1 Setup
---------
I used the following setup on Windows XP SP2:

<Windows Directory>\Sun\Java\Deployment\deployment.config

deployment.system.config=file\:////c\:/WINDOWS/Sun/Java/Deployment/deployment.propertis
deployment.system.config.mandatory=true

The flag "mandatory" was set to "true", in order to enforce the 
"deployment.system.config" file to be read.
Furthermore, a typo was advertedly made in the file name, so that the file 
cannot be found. An error message is expected because of the missing file.


1.2 Using Java Plug-in
1.2.1 Using Classic Java Plug-in
--------------------------------
Starting IE with any Java applet gives an error message of the following kind,
indicating the system level deployment.config file is read (mind the mis-spelt
file name):

"You cannot view applets in your browser because a required configuration
 file could not be found at the specified location:
 file:////c:/WINDOWS/Sun/Java/Deployment/deployment.propertis.
 You will need to restart your browser when the configuration problem is 
 resolved."

1.2.2 Using next-generation Java Plug-in
----------------------------------------
IE starts just fine with any Java applet run in Plugin2.
No error message is given.
This suggests that the system level deployment.config is
simply ignored.


2. Docs
-------
It is assumed that the docs for Java SE 6 deployment properties also apply for
the "next-generation Java Plug-in":

http://java.sun.com/javase/6/docs/technotes/guides/deployment/deployment-guide/properties.html
Posted Date : 2008-12-17 09:43:12.0

N/A

Although the system level properties are being used by the new plugin, the mandatory flag is implemented in Java Web Start and the old plugin by calling Config.isConfigValid();, and then exiting with an error if this returns false.
This check is missing in the initialization of the new plugin
Posted Date : 2008-12-17 16:26:08.0