Is The Java Tutorials Translucent Window example giving trouble to those playing with jdk7?

Right from the JavaDocs for java.awt.frame.setOpacity() in JDK7:

The following conditions must be met in order to set the opacity value less than 1.0f:

• The TRANSLUCENT translucency must be supported by the underlying system
• The window must be undecorated (see setUndecorated(boolean) and Dialog.setUndecorated(boolean))
• The window must not be in full-screen mode (see GraphicsDevice.setFullScreenWindow(Window))

If the requested opacity value is less than 1.0f, and any of the above conditions are not met, the window opacity will not change, and the IllegalComponentStateException will be thrown.

The behavior that you are seeing is documented and is expected behavior.

This is a verified bug. I have sent Oracle information on their sample code failing using the default install of JDK 1.7.0 or JRE7. Using the source code below compiled into TranslucentWindow.java, it fails and produces the exception initially indicated above.

From web page Oracle's Translucency / Shaped Windows Page

// Taken from http://download.oracle.com/javase/tutorial/uiswing/misc/trans_shaped_windows.html#uniform 
import java.awt.*;
import javax.swing.*;
import static java.awt.GraphicsDevice.WindowTranslucency.*;

public class TranslucentWindow extends JFrame {
public TranslucentWindow() {
    super("TranslucentWindow");
    setLayout(new GridBagLayout());

    setSize(300,200);
    setLocationRelativeTo(null);
    setDefaultCloseOperation(JFrame.EXIT_ON_CLOSE);

    //Add a sample button.
    add(new JButton("I am a Button"));
}

public static void main(String[] args)  {
        // Determine if the GraphicsDevice supports translucency.
        GraphicsEnvironment ge = GraphicsEnvironment.getLocalGraphicsEnvironment();
        GraphicsDevice gd = ge.getDefaultScreenDevice();

        //If translucent windows aren't supported, exit.
        if (!gd.isWindowTranslucencySupported(TRANSLUCENT))
    {
        System.err.println("Translucency is not supported");
        System.exit(0);
    }

    // Create the GUI on the event-dispatching thread
    SwingUtilities.invokeLater(new Runnable()
    {
        @Override
        public void run()
        {
            TranslucentWindow tw = new TranslucentWindow();
            // Set the window to 55% opaque (45% translucent).
            tw.setOpacity(0.55f);
            // Display the window.
            tw.setVisible(true);
        }
    });
}

}

Exception in thread "AWT-EventQueue-0" java.awt.IllegalComponentStateException: The frame is decorated
    at java.awt.Frame.setOpacity(Frame.java:960)
    at TranslucentWindow$1.run(TranslucentWindow.java:38)
    at java.awt.event.InvocationEvent.dispatch(InvocationEvent.java:251)
    at java.awt.EventQueue.dispatchEventImpl(EventQueue.java:705)
    at java.awt.EventQueue.access$000(EventQueue.java:101)
    at java.awt.EventQueue$3.run(EventQueue.java:666)
    at java.awt.EventQueue$3.run(EventQueue.java:664)
    at java.security.AccessController.doPrivileged(Native Method)
    at java.security.ProtectionDomain$1.doIntersectionPrivilege(ProtectionDomain.java:76)
    at java.awt.EventQueue.dispatchEvent(EventQueue.java:675)
    at java.awt.EventDispatchThread.pumpOneEventForFilters(EventDispatchThread.java:211)
    at java.awt.EventDispatchThread.pumpEventsForFilter(EventDispatchThread.java:128)
    at java.awt.EventDispatchThread.pumpEventsForHierarchy(EventDispatchThread.java:117)
    at java.awt.EventDispatchThread.pumpEvents(EventDispatchThread.java:113)
    at java.awt.EventDispatchThread.pumpEvents(EventDispatchThread.java:105)
    at java.awt.EventDispatchThread.run(EventDispatchThread.java:90)

Use com.sun.awt.AWTUtilities.setWindowOpacity(w, 0.5f) in JDK 7.

See here.

I think you need to setUndecorated before setBackground this will fix the problem