SourceForge Submitter: pieterpeter .
The run.conf file, called by the run.sh shell script,
resets the JAVA_OPTS environment variable, which
frustrates the user trying to pass non-standard options.

This is the fragment from the run.conf:
#

1. Specify options to pass to the Java VM.
   #
   JAVA_OPTS="-server -Xms128m -Xmx128m"
2. Sample JDK 1.3.1 JPDA settings

In 3.2.6 this line was a still a comment.

The fix is trivial of course:

if [ "x$JAVA_OPTS" = "x" ]; then
JAVA_OPTS="-server -Xms128m -Xmx128m"
fi

or make it a comment again.