John,
Following is the answer to your questions:
1. Do both systems have the same set of updates to CW 10.6 installed? Yes
2. Are the options in the projects set identically? Project setting should be the same as it came from SVN
3. Is the java version on the system the same? The one that have issue is V6 and the one that have no issue is V8 but when the refresh both to V8, the problem still exist
4. Is the OS the same on both computers with the same updates (this is least likely cause). Both Win7