Arguably Java 1.6 should be better. But different versions of LW & Java seem to behave differently on different people's computers.

Changing compatibility mode to either win 2000 or NT often fixes the problem you're having. Not sure why. Worth trying again.

How about setting up a new user account on your XP system & use a shortcut to the program (no need to reinstall) & see if it runs ok from there.

One odd thing I noticed about your crash log was this:

--------------- S Y S T E M ---------------
OS: Windows 98 Build 67766446

So for a while there I thought you were running win 98.

BTW you never did say, do you run your Linksys in UPnP or Port forwarding mode? Most people have better success port forwarding with that model due to its firmware issues.

I also noticed 'VM state:not at safepoint (normal execution)'. So are you able to increase virtual memory on your machine?