Eclipse BlackBerry JDE ClassNotFound Exception

Environment: Eclipse 3.1.1, BlackBerry JDE 4.2.1

When I first set up my eclipse for BlackBerry development, I got this exception: The type net.rim.device.internal.ui.Cursor cannot be resolved. It is indirectly referenced from required .class files. After searching the the Internet and the blackberry java forum, I figured out that it is caused by the java compliance level setting. To fix it, go to Window - Preferences - Java - Compiler, set the Java Compliance Level to 1.4.