Martin,
   
  Thank you so much for helping 
  out. I re-installed Eclipse with correct RSE version and now it works. Just a 
  few issues:
   
  1)      
  What can I do to 
  improve RSE performance? Yes, I found the file buffer (set to 400K) and 
  directory transfer compression settings (set to TGZ), but is there anything 
  else to speed it up? What are the recommended settings on 
  performance?
  2)      
  When I upload 
  files to SFTP server from RSE, is there a way to set default ownership and 
  permission of files? For example I want to be logged in as “root” but upload 
  my files to be owned by “apache”, avoiding manual step of changing ownership. 
  Also I am not sure if the directory compression is really working – I copied a 
  bunch of dirs onto RSE drive and the progress indicator showed files copied 
  one-by-one.
  3)      
  When I re-open 
  Eclipse, connection resumes automatically and a workplace on remote system 
  opens just fine. However, the first file to open always fails, instead giving 
  this message: “Could not open the editor. Editor could not be initialized”. 
  Apparently workplace starts up before connection is re-established. When I 
  click on “Details” button here is what I get inside that file’s 
  window:
   
  java.lang.RuntimeException: 
  org.eclipse.core.runtime.CoreException: Connection not found for host: 
  AWS.KRUGLYAK.COM
                          
  at 
  org.eclipse.rse.internal.efs.RSEFileStore.fetchInfo(RSEFileStore.java:266)
                          
  at 
  org.eclipse.core.internal.localstore.FileSystemResourceManager.fastIsSynchronized(FileSystemResourceManager.java:324)
                          
  at 
  org.eclipse.core.internal.localstore.FileSystemResourceManager.isSynchronized(FileSystemResourceManager.java:559)
                          
  at 
  org.eclipse.core.internal.resources.Resource.isSynchronized(Resource.java:1336)
                          
  at 
  org.eclipse.core.internal.resources.File.checkSynchronized(File.java:97)
                          
  at 
  org.eclipse.core.internal.resources.File.getContentDescription(File.java:278)
                          
  at 
  org.eclipse.core.internal.filebuffers.ResourceTextFileBuffer.cacheBOM(ResourceTextFileBuffer.java:306)
                          
  at 
  org.eclipse.core.internal.filebuffers.ResourceTextFileBuffer.cacheEncodingState(ResourceTextFileBuffer.java:485)
                          
  at 
  org.eclipse.core.internal.filebuffers.ResourceTextFileBuffer.initializeFileBufferContent(ResourceTextFileBuffer.java:285)
                          
  at 
  org.eclipse.core.internal.filebuffers.ResourceFileBuffer.create(ResourceFileBuffer.java:241)
                          
  at 
  org.eclipse.core.internal.filebuffers.TextFileBufferManager.connect(TextFileBufferManager.java:112)
                          
  at 
  org.eclipse.ui.editors.text.TextFileDocumentProvider.createFileInfo(TextFileDocumentProvider.java:557)
                          
  at 
  net.sourceforge.phpeclipse.phpeditor.PHPDocumentProvider.createFileInfo(PHPDocumentProvider.java:1115)
                          
  at 
  org.eclipse.ui.editors.text.TextFileDocumentProvider.connect(TextFileDocumentProvider.java:476)
                          
  at 
  org.eclipse.ui.texteditor.AbstractTextEditor.doSetInput(AbstractTextEditor.java:3991)
                          
  at 
  org.eclipse.ui.texteditor.StatusTextEditor.doSetInput(StatusTextEditor.java:190)
                          
  at 
  org.eclipse.ui.texteditor.AbstractDecoratedTextEditor.doSetInput(AbstractDecoratedTextEditor.java:1325)
                          
  at 
  net.sourceforge.phpeclipse.phpeditor.PHPEditor.internalDoSetInput(PHPEditor.java:3693)
                          
  at 
  net.sourceforge.phpeclipse.phpeditor.PHPEditor.doSetInput(PHPEditor.java:3899)
                          
  at 
  net.sourceforge.phpeclipse.phpeditor.PHPUnitEditor.doSetInput(PHPUnitEditor.java:2340)
                          
  at 
  org.eclipse.ui.texteditor.AbstractTextEditor$19.run(AbstractTextEditor.java:3026)
                          
  at 
  org.eclipse.jface.operation.ModalContext.runInCurrentThread(ModalContext.java:458)
                          
  at 
  org.eclipse.jface.operation.ModalContext.run(ModalContext.java:366)
                          
  at 
  org.eclipse.jface.window.ApplicationWindow$1.run(ApplicationWindow.java:758)
                          
  at 
  org.eclipse.swt.custom.BusyIndicator.showWhile(BusyIndicator.java:70)
                          
  at 
  org.eclipse.jface.window.ApplicationWindow.run(ApplicationWindow.java:755)
                          
  at 
  org.eclipse.ui.internal.WorkbenchWindow.run(WorkbenchWindow.java:2487)
                          
  at 
  org.eclipse.ui.texteditor.AbstractTextEditor.internalInit(AbstractTextEditor.java:3044)
                          
  at 
  org.eclipse.ui.texteditor.AbstractTextEditor.init(AbstractTextEditor.java:3071)
                          
  at 
  org.eclipse.ui.internal.EditorManager.createSite(EditorManager.java:799)
                          
  at 
  org.eclipse.ui.internal.EditorReference.createPartHelper(EditorReference.java:643)
                          
  at 
  org.eclipse.ui.internal.EditorReference.createPart(EditorReference.java:428)
                          
  at 
  org.eclipse.ui.internal.WorkbenchPartReference.getPart(WorkbenchPartReference.java:594)
                          
  at 
  org.eclipse.ui.internal.EditorAreaHelper.setVisibleEditor(EditorAreaHelper.java:263)
                          
  at 
  org.eclipse.ui.internal.EditorManager.setVisibleEditor(EditorManager.java:1410)
                          
  at 
  org.eclipse.ui.internal.EditorManager$5.runWithException(EditorManager.java:944)
                          
  at 
  org.eclipse.ui.internal.StartupThreading$StartupRunnable.run(StartupThreading.java:31)
                          
  at 
  org.eclipse.swt.widgets.RunnableLock.run(RunnableLock.java:35)
                          
  at 
  org.eclipse.swt.widgets.Synchronizer.runAsyncMessages(Synchronizer.java:133)
                          
  at 
  org.eclipse.swt.widgets.Display.runAsyncMessages(Display.java:3800)
                          
  at 
  org.eclipse.swt.widgets.Display.readAndDispatch(Display.java:3425)
                          
  at 
  org.eclipse.ui.application.WorkbenchAdvisor.openWindows(WorkbenchAdvisor.java:803)
                          
  at 
  org.eclipse.ui.internal.Workbench$27.runWithException(Workbench.java:1361)
                          
  at 
  org.eclipse.ui.internal.StartupThreading$StartupRunnable.run(StartupThreading.java:31)
                          
  at 
  org.eclipse.swt.widgets.RunnableLock.run(RunnableLock.java:35)
                          
  at 
  org.eclipse.swt.widgets.Synchronizer.runAsyncMessages(Synchronizer.java:133)
                          
  at 
  org.eclipse.swt.widgets.Display.runAsyncMessages(Display.java:3800)
                          
  at 
  org.eclipse.swt.widgets.Display.readAndDispatch(Display.java:3425)
                          
  at 
  org.eclipse.ui.internal.Workbench.runUI(Workbench.java:2293)
                          
  at 
  org.eclipse.ui.internal.Workbench.access$4(Workbench.java:2198)
                          
  at 
  org.eclipse.ui.internal.Workbench$5.run(Workbench.java:493)
                          
  at 
  org.eclipse.core.databinding.observable.Realm.runWithDefault(Realm.java:288)
                          
  at 
  org.eclipse.ui.internal.Workbench.createAndRunWorkbench(Workbench.java:488)
                          
  at 
  org.eclipse.ui.PlatformUI.createAndRunWorkbench(PlatformUI.java:149)
                          
  at 
  org.eclipse.ui.internal.ide.application.IDEApplication.start(IDEApplication.java:113)
                          
  at 
  org.eclipse.equinox.internal.app.EclipseAppHandle.run(EclipseAppHandle.java:193)
                          
  at 
  org.eclipse.core.runtime.internal.adaptor.EclipseAppLauncher.runApplication(EclipseAppLauncher.java:110)
                          
  at 
  org.eclipse.core.runtime.internal.adaptor.EclipseAppLauncher.start(EclipseAppLauncher.java:79)
                          
  at 
  org.eclipse.core.runtime.adaptor.EclipseStarter.run(EclipseStarter.java:386)
                          
  at 
  org.eclipse.core.runtime.adaptor.EclipseStarter.run(EclipseStarter.java:179)
                          
  at sun.reflect.NativeMethodAccessorImpl.invoke0(Native 
  Method)
                          
  at sun.reflect.NativeMethodAccessorImpl.invoke(Unknown 
  Source)
                          
  at sun.reflect.DelegatingMethodAccessorImpl.invoke(Unknown 
  Source)
                          
  at java.lang.reflect.Method.invoke(Unknown Source)
                          
  at 
  org.eclipse.equinox.launcher.Main.invokeFramework(Main.java:549)
                          
  at 
  org.eclipse.equinox.launcher.Main.basicRun(Main.java:504)
                          
  at org.eclipse.equinox.launcher.Main.run(Main.java:1236)
  Caused by: 
  org.eclipse.core.runtime.CoreException: Connection not found for host: 
  AWS.KRUGLYAK.COM
                          
  at 
  org.eclipse.rse.internal.efs.RSEFileStoreImpl.getConnectedFileSubSystem(RSEFileStoreImpl.java:240)
                          
  at 
  org.eclipse.rse.internal.efs.RSEFileStoreImpl.getRemoteFileObject(RSEFileStoreImpl.java:318)
                          
  at 
  org.eclipse.rse.internal.efs.RSEFileStoreImpl.getRemoteFileObject(RSEFileStoreImpl.java:305)
                          
  at 
  org.eclipse.rse.internal.efs.RSEFileStoreImpl.fetchInfo(RSEFileStoreImpl.java:496)
                          
  at 
  org.eclipse.rse.internal.efs.RSEFileStore.fetchInfo(RSEFileStore.java:275)
                          
  at 
  org.eclipse.rse.internal.efs.RSEFileStore.fetchInfo(RSEFileStore.java:257)
                          
  ... 66 more
   
  Could something be done about 
  the performance, the file ownership / compression and the workplace 
  re-opening? If I close and re-open the failed file by hand I can work with it, 
  though this is obviously an annoying extra step.
   
  Thanks 
  again!
   
  Dmitriy