Mark has produced a "jre" used with 1.2.0-RC release:
This jre includes: JAI, ImageIO, and ImageIO-EXT 1.0.5 (and we are working with GeoTools 2.6.2).
This release is unable to show the bluemarble.tif included in the sample data (http://udig.refractions.net/files/data/data_1_2.zip).
We are able to display this image on Windows and Mac so it is something specific about Linux (and this JRE?).