I'm not sure of the precise conditions that the original poster experienced, but there were issues preventing the setting of the "spaces for tabs" preference from taking effect and being respected, due to some odd behavior in the base ITextViewer implementation class.
There's a work-around now in the IMP runtime for this, and it seems to work in both the case where there is a language-specific "spaces for tabs" preference, and in the case where there is only the global preference.
moving open issues in X10 DT 2.0.1.1 to X10 DT 2.0.2.2 as discussed with Bob.