here is what I received from Lata Amujuri from Borland:

1. Tools | Configure Servers. Enable the Generic Server configuration.
2. Set the home directory to the WebSphere home dir.
3. Set main class to com.ibm.ws.bootstrap.WSLauncher
4. Set VM parameters to :
-Xmx256M
-Xbootclasspath/p:APPSERVER_HOME/java/jre/lib/ext/ibmorb.jar;APPSERVER_HOME/java/jre/lib/ext/ibmext.jar
-Dserver.root=APPSERVER_HOME -Ddb2j.system.home=APPSERVER_HOME/properties
-Duser.install.root=APPSERVER_HOME
-Dcom.ibm.itp.location=APPSERVER_HOME/deploytool/itp
-Dwas.install.root=APPSERVER_HOME
-Djava.security.auth.login.config=APPSERVER_HOME/properties/wsjaas.conf
-Djava.security.policy=APPSERVER_HOME/properties/server.policy
-Dws.ext.dirs=APPSERVER_HOME\java\lib;APPSERVER_HOME\classes;APPSERVER_HOME\lib;APPSERVER_HOME\lib\ext;APPSERVER_HOME\web\help;APPSERVER_HOME\deploytool\itp\plugins\com.ibm.etools.ejbdeploy\runtime;WEBSPHERE_MQSERIES_HOME\java\lib

5. Set application parameters to
com.ibm.ws.runtime.WsServer APPSERVER_HOME/config <Cell name>  <Node name> <server name>

6. Set working directory to APPSERVER_HOME/bin

7. Add the following jars/directories to the classes tab.
APPSERVER_HOME/properties
APPSERVER_HOME/lib/bootstrap.jar
APPSERVER_HOME/lib/j2ee.jar
APPSERVER_HOME/lib/lmproxy.jar

8. OK

9. Create a new project.
10. Set server to Generic Server..
11. Tools | Configure Libraries. Create a new library definition for running
WebSphere clients and add the following directories/jars :
APPSERVER_HOME/lib/ecutils.jar
APPSERVER_HOME/lib/j2ee.jar
APPSERVER_HOME/lib/naming.jar
APPSERVER_HOME/lib/namingClient.jar
APPSERVER_HOME/properties

You should now be able to work with the server in JBuilder. Please note that
when running clients accessing EJBs, you will need to add the jar containing
stubs/skeletons to the client's classpath. You can do this by creating a
library containing the EJB jar and adding it to your project before running the
client.

- Lata