I had a think-session with Andrew, and finally noticed that the eclipse plugin started the processes with -Dderby.system.home=. Using that property with NetworkServerControl start and ij, I could duplicate the behavior outside eclipse.
I do not think changing the default and template policy file is the right thing to do at this point. I logged DERBY-2908. If we can still fix this before Saturday, that would be great; otherwise, I'll withhold the plugins from the distribution until we can create a new version of the plugin that does *not* default derby.system.home to '.'. Myrna
