Java problems on Redhat 7.2

[James Pifer <jamesredhatlist tnjinfl com>]

This obviously isn't a mailing list for Java questions, but I'm not
getting any answers on the Javasoft forum and it is related to Redhat
7.2. I have Sun's JDK 1.3.1_03 installed by using the RPM. 

A few questions:
-Are there any other environment variables that need to be set up
besides CLASSPATH and JAVA_HOME?
-How does the JRE know how to include JAR files that are in the
/usr/java/jdk1.3.1_03/jre/lib/ext directory?

I ask because I have a third party app and they vendor says just stick
these jars in the /lib/ext directory and it will find them. Well, mine
doesn't. I'm running java from /usr/java/jdk1.3.1_03/jre/bin. 

The vendor also says the JRE should automatically look in the
/usr/java/jdk1.3.1_03/jre/lib directory for class files. Is that
correct? I thought it had to have a classpath set to the lib directory. 

Any help is appreciated. 

James