Hi...

that is all very strange what you are describing somehow I still can't really believe all is right with your java installation. Can you please try to go run the Java VM over a command prompt with the a full qualified call.
Open a prompt.
Go into your phex installation directory where your phex.jar is located. ( Type: "cd /d c:\phex" )
And then call the command: "c:\java\jre1.3\bin\java -jar phex.jar"

Of cource you have to replace the path with the directorys on your machine.
If Phex prints any error msg onto your console something is definitely wrong. You can send me your error msg to ....

You can also try the new Phex version 0.6 that is released shortly.

Don't care about the password when connecting to the network.

Gregor