diff --git a/rse/examples/org.eclipse.rse.examples.daytime/src/org/eclipse/rse/examples/daytime/subsystems/DaytimeSubSystem.java b/rse/examples/org.eclipse.rse.examples.daytime/src/org/eclipse/rse/examples/daytime/subsystems/DaytimeSubSystem.java
index 3dc8084649d..64768c628cb 100644
--- a/rse/examples/org.eclipse.rse.examples.daytime/src/org/eclipse/rse/examples/daytime/subsystems/DaytimeSubSystem.java
+++ b/rse/examples/org.eclipse.rse.examples.daytime/src/org/eclipse/rse/examples/daytime/subsystems/DaytimeSubSystem.java
@@ -1,5 +1,5 @@
 /*******************************************************************************
- * Copyright (c) 2006, 2008 Wind River Systems, Inc.
+ * Copyright (c) 2006, 2009 Wind River Systems, Inc.
  * All rights reserved. This program and the accompanying materials
  * are made available under the terms of the Eclipse Public License v1.0
  * which accompanies this distribution, and is available at
@@ -11,6 +11,7 @@
  * David McKnight   (IBM)        - [216252] [api][nls] Resource Strings specific to subsystems should be moved from rse.ui into files.ui / shells.ui / processes.ui where possible
  * David McKnight   (IBM)        - [220547] [api][breaking] SimpleSystemMessage needs to specify a message id and some messages should be shared
  * Martin Oberhuber (Wind River) - [218304] Improve deferred adapter loading
+ * David McKnight   (IBM)        - [272882] [api] Handle exceptions in IService.initService()
  *******************************************************************************/
 
 package org.eclipse.rse.examples.daytime.subsystems;
@@ -35,6 +36,7 @@ import org.eclipse.rse.services.clientserver.messages.CommonMessages;
 import org.eclipse.rse.services.clientserver.messages.ICommonMessageIds;
 import org.eclipse.rse.services.clientserver.messages.SimpleSystemMessage;
 import org.eclipse.rse.services.clientserver.messages.SystemMessage;
+import org.eclipse.rse.services.clientserver.messages.SystemMessageException;
 import org.eclipse.rse.ui.RSEUIPlugin;
 import org.eclipse.rse.ui.model.ISystemRegistryUI;
 
@@ -51,7 +53,7 @@ public class DaytimeSubSystem extends SubSystem {
 		fDaytimeService = daytimeService;
 	}
 
-	public void initializeSubSystem(IProgressMonitor monitor) {
+	public void initializeSubSystem(IProgressMonitor monitor)throws SystemMessageException {
 		//This is called after connect - expand the daytime node.
 		// Always called in worker thread.
 		super.initializeSubSystem(monitor);
diff --git a/rse/examples/org.eclipse.rse.examples.dstore/src/org/eclipse/rse/examples/dstore/subsystems/SampleSubSystem.java b/rse/examples/org.eclipse.rse.examples.dstore/src/org/eclipse/rse/examples/dstore/subsystems/SampleSubSystem.java
index 96ef6cb32a8..2982bbe0963 100644
--- a/rse/examples/org.eclipse.rse.examples.dstore/src/org/eclipse/rse/examples/dstore/subsystems/SampleSubSystem.java
+++ b/rse/examples/org.eclipse.rse.examples.dstore/src/org/eclipse/rse/examples/dstore/subsystems/SampleSubSystem.java
@@ -9,7 +9,7 @@
  * component that contains this file: David McKnight.
  * 
  * Contributors:
- * {Name} (company) - description of contribution.
+ * David McKnight   (IBM)        - [272882] [api] Handle exceptions in IService.initService()
  ********************************************************************************/
 package org.eclipse.rse.examples.dstore.subsystems;
 
@@ -20,6 +20,7 @@ import org.eclipse.rse.core.subsystems.SubSystem;
 import org.eclipse.rse.examples.dstore.services.IHostSampleContainer;
 import org.eclipse.rse.examples.dstore.services.IHostSampleObject;
 import org.eclipse.rse.examples.dstore.services.SampleService;
+import org.eclipse.rse.services.clientserver.messages.SystemMessageException;
 
 public class SampleSubSystem extends SubSystem {
 
@@ -104,7 +105,7 @@ public class SampleSubSystem extends SubSystem {
 	}
 
 	@Override
-	public void initializeSubSystem(IProgressMonitor monitor) {
+	public void initializeSubSystem(IProgressMonitor monitor) throws SystemMessageException{
 		super.initializeSubSystem(monitor);
 		
 		getSampleService().initService(monitor);
diff --git a/rse/plugins/org.eclipse.rse.core/src/org/eclipse/rse/core/subsystems/AbstractConnectorService.java b/rse/plugins/org.eclipse.rse.core/src/org/eclipse/rse/core/subsystems/AbstractConnectorService.java
index 15f7bfe0f70..6450425299b 100644
--- a/rse/plugins/org.eclipse.rse.core/src/org/eclipse/rse/core/subsystems/AbstractConnectorService.java
+++ b/rse/plugins/org.eclipse.rse.core/src/org/eclipse/rse/core/subsystems/AbstractConnectorService.java
@@ -18,6 +18,7 @@
  * David Dykstal (IBM) - [189483] fix spelling in initialize/uninitialize method signatures
  * David Dykstal (IBM) - [210474] Deny save password function missing
  * David McKnight (IBM) - [249222] [api] Access to communication listeners in AbstractConnectorService
+ * David McKnight   (IBM)        - [272882] [api] Handle exceptions in IService.initService()
  ********************************************************************************/
 package org.eclipse.rse.core.subsystems;
 
@@ -32,6 +33,7 @@ import org.eclipse.rse.core.RSEPreferencesManager;
 import org.eclipse.rse.core.model.IHost;
 import org.eclipse.rse.core.model.IRSEPersistableContainer;
 import org.eclipse.rse.core.model.RSEModelObject;
+import org.eclipse.rse.services.clientserver.messages.SystemMessageException;
 
 /**
  * This is a base class to make it easier to create connector services.
@@ -295,7 +297,7 @@ public abstract class AbstractConnectorService extends RSEModelObject implements
 	 * Initialize any subsystems just after connecting to the host.
 	 * @param monitor a progress monitor to report progress of initialization.
 	 */
-	protected final void initializeSubSystems(IProgressMonitor monitor) {
+	protected final void initializeSubSystems(IProgressMonitor monitor) throws SystemMessageException {
 		for (int i = 0; i < _registeredSubSystems.size(); i++)
 		{
 			ISubSystem ss = (ISubSystem)_registeredSubSystems.get(i);
diff --git a/rse/plugins/org.eclipse.rse.core/src/org/eclipse/rse/core/subsystems/ISubSystem.java b/rse/plugins/org.eclipse.rse.core/src/org/eclipse/rse/core/subsystems/ISubSystem.java
index f3c5ce798b0..50a9203635b 100644
--- a/rse/plugins/org.eclipse.rse.core/src/org/eclipse/rse/core/subsystems/ISubSystem.java
+++ b/rse/plugins/org.eclipse.rse.core/src/org/eclipse/rse/core/subsystems/ISubSystem.java
@@ -1,5 +1,5 @@
 /********************************************************************************
- * Copyright (c) 2006, 2008 IBM Corporation and others. All rights reserved.
+ * Copyright (c) 2006, 2009 IBM Corporation and others. All rights reserved.
  * This program and the accompanying materials are made available under the terms
  * of the Eclipse Public License v1.0 which accompanies this distribution, and is
  * available at http://www.eclipse.org/legal/epl-v10.html
@@ -20,6 +20,7 @@
  * Martin Oberhuber (Wind River) - [cleanup] Add API "since" Javadoc tags
  * David Dykstal (IBM) - [225089][ssh][shells][api] Canceling connection leads to exception
  * Martin Oberhuber (Wind River) - [218304] Improve deferred adapter loading
+ * David McKnight   (IBM)        - [272882] [api] Handle exceptions in IService.initService()
  ********************************************************************************/
 
 package org.eclipse.rse.core.subsystems;
@@ -99,8 +100,10 @@ public interface ISubSystem extends ISystemFilterPoolReferenceManagerProvider, I
 	 *            during long-running operation. Cancellation is typically not
 	 *            supported since it might leave the system in an inconsistent
 	 *            state.
+	 *            
+	 * @throws SystemMessageException if an error occurs during initialization.
 	 */
-	public void initializeSubSystem(IProgressMonitor monitor);
+	public void initializeSubSystem(IProgressMonitor monitor) throws SystemMessageException;
 
 	/**
 	 * Called on each subsystem associated with a particular
diff --git a/rse/plugins/org.eclipse.rse.services.dstore/META-INF/MANIFEST.MF b/rse/plugins/org.eclipse.rse.services.dstore/META-INF/MANIFEST.MF
index 0282c113733..38c534c0fda 100644
--- a/rse/plugins/org.eclipse.rse.services.dstore/META-INF/MANIFEST.MF
+++ b/rse/plugins/org.eclipse.rse.services.dstore/META-INF/MANIFEST.MF
@@ -2,7 +2,7 @@ Manifest-Version: 1.0
 Bundle-ManifestVersion: 2
 Bundle-Name: %pluginName
 Bundle-SymbolicName: org.eclipse.rse.services.dstore
-Bundle-Version: 3.0.100.qualifier
+Bundle-Version: 3.1.0.qualifier
 Bundle-Activator: org.eclipse.rse.internal.services.dstore.Activator
 Bundle-Localization: plugin
 Require-Bundle: org.eclipse.core.runtime,
diff --git a/rse/plugins/org.eclipse.rse.services.dstore/src/org/eclipse/rse/internal/services/dstore/processes/DStoreProcessService.java b/rse/plugins/org.eclipse.rse.services.dstore/src/org/eclipse/rse/internal/services/dstore/processes/DStoreProcessService.java
index 590daad65a6..d186941f880 100644
--- a/rse/plugins/org.eclipse.rse.services.dstore/src/org/eclipse/rse/internal/services/dstore/processes/DStoreProcessService.java
+++ b/rse/plugins/org.eclipse.rse.services.dstore/src/org/eclipse/rse/internal/services/dstore/processes/DStoreProcessService.java
@@ -1,5 +1,5 @@
 /********************************************************************************
- * Copyright (c) 2006, 2008 IBM Corporation and others. All rights reserved.
+ * Copyright (c) 2006, 2009 IBM Corporation and others. All rights reserved.
  * This program and the accompanying materials are made available under the terms
  * of the Eclipse Public License v1.0 which accompanies this distribution, and is
  * available at http://www.eclipse.org/legal/epl-v10.html
@@ -16,6 +16,7 @@
  * David McKnight   (IBM)        - [159092] For to use correct process miner id
  * David McKnight   (IBM)        - [196624] dstore miner IDs should be String constants rather than dynamic lookup
  * Martin Oberhuber (Wind River) - [226262] Make IService IAdaptable and add Javadoc
+ * David McKnight   (IBM)        - [272882] [api] Handle exceptions in IService.initService()
  ********************************************************************************/
 
 package org.eclipse.rse.internal.services.dstore.processes;
@@ -40,7 +41,6 @@ import org.eclipse.rse.services.dstore.util.DStoreStatusMonitor;
 import org.eclipse.rse.services.processes.AbstractProcessService;
 
 public class DStoreProcessService extends AbstractProcessService
-// TODO implements IDStoreService ?
 {
 	protected IDataStoreProvider _provider;
 	protected DataElement _minerElement = null;
@@ -272,7 +272,7 @@ public class DStoreProcessService extends AbstractProcessService
 		return getDataStore().find(_minerElement, DE.A_NAME, "universal.killinfo"); //$NON-NLS-1$
 	}
 
-	public void initService(IProgressMonitor monitor)
+	public void initService(IProgressMonitor monitor) throws SystemMessageException
 	{
 		super.initService(monitor);
 		initMiner(monitor);
diff --git a/rse/plugins/org.eclipse.rse.services.dstore/src/org/eclipse/rse/services/dstore/AbstractDStoreService.java b/rse/plugins/org.eclipse.rse.services.dstore/src/org/eclipse/rse/services/dstore/AbstractDStoreService.java
index 2c78c478483..399a81ed2f1 100644
--- a/rse/plugins/org.eclipse.rse.services.dstore/src/org/eclipse/rse/services/dstore/AbstractDStoreService.java
+++ b/rse/plugins/org.eclipse.rse.services.dstore/src/org/eclipse/rse/services/dstore/AbstractDStoreService.java
@@ -1,5 +1,5 @@
 /*******************************************************************************
- * Copyright (c) 2006, 2008 IBM Corporation and others.
+ * Copyright (c) 2006, 2009 IBM Corporation and others.
  * All rights reserved. This program and the accompanying materials
  * are made available under the terms of the Eclipse Public License v1.0
  * which accompanies this distribution, and is available at
@@ -18,6 +18,7 @@
  * David McKnight   (IBM)        - [209593] [api] check for existing query to avoid duplicates
  * David McKnight   (IBM)        - [216252] use SimpleSystemMessage instead of getMessage()
  * Martin Oberhuber (Wind River) - [226262] Make IService IAdaptable
+ * David McKnight   (IBM)        - [272882] [api] Handle exceptions in IService.initService()
  *******************************************************************************/
 
 package org.eclipse.rse.services.dstore;
@@ -34,6 +35,7 @@ import org.eclipse.dstore.core.model.IDataStoreProvider;
 import org.eclipse.rse.internal.services.dstore.ServiceResources;
 import org.eclipse.rse.services.AbstractService;
 import org.eclipse.rse.services.clientserver.messages.SystemMessage;
+import org.eclipse.rse.services.clientserver.messages.SystemMessageException;
 import org.eclipse.rse.services.dstore.util.DStoreStatusMonitor;
 
 public abstract class AbstractDStoreService extends AbstractService implements IDStoreService
@@ -412,7 +414,7 @@ public abstract class AbstractDStoreService extends AbstractService implements I
 		}
 	}
 
-	public void initService(IProgressMonitor monitor)
+	public void initService(IProgressMonitor monitor) throws SystemMessageException
 	{
 		super.initService(monitor);
 		initMiner(monitor);
diff --git a/rse/plugins/org.eclipse.rse.services.ssh/src/org/eclipse/rse/internal/services/ssh/files/SftpFileService.java b/rse/plugins/org.eclipse.rse.services.ssh/src/org/eclipse/rse/internal/services/ssh/files/SftpFileService.java
index 2f9d9ba61d8..e31143b0c7b 100644
--- a/rse/plugins/org.eclipse.rse.services.ssh/src/org/eclipse/rse/internal/services/ssh/files/SftpFileService.java
+++ b/rse/plugins/org.eclipse.rse.services.ssh/src/org/eclipse/rse/internal/services/ssh/files/SftpFileService.java
@@ -37,6 +37,7 @@
  * Martin Oberhuber (Wind River) - [237616][ssh] Dont perform forced setLastModified during upload
  * Martin Oberhuber (Wind River) - [227135] Cryptic exception when sftp-server is missing
  * David McKnight   (IBM)        - [271244] [sftp files] "My Home" filter not working
+ * David McKnight   (IBM)        - [272882] [api] Handle exceptions in IService.initService()
  *******************************************************************************/
 
 package org.eclipse.rse.internal.services.ssh.files;
@@ -1124,16 +1125,10 @@ public class SftpFileService extends AbstractFileService implements ISshService,
 		}
 	}
 
-	public void initService(IProgressMonitor monitor) {
+	public void initService(IProgressMonitor monitor) throws SystemMessageException {
 		Activator.trace("SftpFileService.initService"); //$NON-NLS-1$
 		super.initService(monitor);
-		 try {
-			 connect();
-		 }
-		 catch (Exception e)
-		 {
-			 Activator.trace("SftpFileService.initService failed: "+e.toString()); //$NON-NLS-1$
-		 }
+		connect();
 	}
 
 	public void uninitService(IProgressMonitor monitor) {
diff --git a/rse/plugins/org.eclipse.rse.services/src/org/eclipse/rse/services/AbstractService.java b/rse/plugins/org.eclipse.rse.services/src/org/eclipse/rse/services/AbstractService.java
index aa86b33dd2f..61e62f34129 100644
--- a/rse/plugins/org.eclipse.rse.services/src/org/eclipse/rse/services/AbstractService.java
+++ b/rse/plugins/org.eclipse.rse.services/src/org/eclipse/rse/services/AbstractService.java
@@ -1,5 +1,5 @@
 /*******************************************************************************
- * Copyright (c) 2008 Wind River Systems, Inc. and others.
+ * Copyright (c) 2009 Wind River Systems, Inc. and others.
  * All rights reserved. This program and the accompanying materials
  * are made available under the terms of the Eclipse Public License v1.0
  * which accompanies this distribution, and is available at
@@ -7,12 +7,15 @@
  *
  * Contributors:
  * Martin Oberhuber (Wind River) - initial API and implementation
+ * David McKnight   (IBM)        - [272882] [api] Handle exceptions in IService.initService()
  *******************************************************************************/
 package org.eclipse.rse.services;
 
 import org.eclipse.core.runtime.IProgressMonitor;
 import org.eclipse.core.runtime.PlatformObject;
 
+import org.eclipse.rse.services.clientserver.messages.SystemMessageException;
+
 /**
  * Abstract default implementation of an RSE Service. Clients are expected to
  * extend this class.
@@ -35,7 +38,7 @@ public abstract class AbstractService extends PlatformObject implements IService
 	 * must call <code>super.initService(monitor)</code> as the first call in
 	 * their implementation.
 	 */
-	public void initService(IProgressMonitor monitor) {
+	public void initService(IProgressMonitor monitor) throws SystemMessageException {
 		// Do nothing by default
 	}
 
diff --git a/rse/plugins/org.eclipse.rse.services/src/org/eclipse/rse/services/IService.java b/rse/plugins/org.eclipse.rse.services/src/org/eclipse/rse/services/IService.java
index dfa6b84599e..e2639b0cd34 100644
--- a/rse/plugins/org.eclipse.rse.services/src/org/eclipse/rse/services/IService.java
+++ b/rse/plugins/org.eclipse.rse.services/src/org/eclipse/rse/services/IService.java
@@ -14,6 +14,7 @@
  * Contributors:
  * Martin Oberhuber (Wind River) - [226262] Make IService IAdaptable and add Javadoc
  * David McKnight   (IBM)        - [271244] [sftp files] "My Home" filter not working
+ * David McKnight   (IBM)        - [272882] [api] Handle exceptions in IService.initService()
  *******************************************************************************/
 
 package org.eclipse.rse.services;
@@ -21,6 +22,8 @@ package org.eclipse.rse.services;
 import org.eclipse.core.runtime.IAdaptable;
 import org.eclipse.core.runtime.IProgressMonitor;
 
+import org.eclipse.rse.services.clientserver.messages.SystemMessageException;
+
 /**
  * IService is the base interface for any non-UI service contributions to RSE.
  *
@@ -62,8 +65,10 @@ public interface IService extends IAdaptable
 	 *            operation. There is no guarantee that cancellation is actually
 	 *            supported by a Service since it would leave the service in a
 	 *            potentially inconsistent, partially initialized state.
+	 *            
+	 * @throws SystemMessageException if an error occurs during initialization.
 	 */
-	public void initService(IProgressMonitor monitor);
+	public void initService(IProgressMonitor monitor) throws SystemMessageException;
 
 	/**
 	 * Clean up this Service. This method is called by clients as part of a
diff --git a/rse/plugins/org.eclipse.rse.services/src/org/eclipse/rse/services/terminals/AbstractDelegatingTerminalService.java b/rse/plugins/org.eclipse.rse.services/src/org/eclipse/rse/services/terminals/AbstractDelegatingTerminalService.java
index 5fd83db8ee5..d79952c0f84 100644
--- a/rse/plugins/org.eclipse.rse.services/src/org/eclipse/rse/services/terminals/AbstractDelegatingTerminalService.java
+++ b/rse/plugins/org.eclipse.rse.services/src/org/eclipse/rse/services/terminals/AbstractDelegatingTerminalService.java
@@ -52,7 +52,7 @@ public abstract class AbstractDelegatingTerminalService extends AbstractTerminal
 		return RSEServicesMessages.AbstractDelegatingTerminalService_name;
 	}
 
-	public void initService(IProgressMonitor monitor) {
+	public void initService(IProgressMonitor monitor) throws SystemMessageException {
 		getRealTerminalService().initService(monitor);
 	}
 
diff --git a/rse/plugins/org.eclipse.rse.subsystems.files.core/src/org/eclipse/rse/subsystems/files/core/servicesubsystem/FileServiceSubSystem.java b/rse/plugins/org.eclipse.rse.subsystems.files.core/src/org/eclipse/rse/subsystems/files/core/servicesubsystem/FileServiceSubSystem.java
index 0d77291d3eb..87120b3357a 100644
--- a/rse/plugins/org.eclipse.rse.subsystems.files.core/src/org/eclipse/rse/subsystems/files/core/servicesubsystem/FileServiceSubSystem.java
+++ b/rse/plugins/org.eclipse.rse.subsystems.files.core/src/org/eclipse/rse/subsystems/files/core/servicesubsystem/FileServiceSubSystem.java
@@ -1,5 +1,5 @@
 /*******************************************************************************
- * Copyright (c) 2006, 2008 IBM Corporation and others.
+ * Copyright (c) 2006, 2009 IBM Corporation and others.
  * All rights reserved. This program and the accompanying materials
  * are made available under the terms of the Eclipse Public License v1.0
  * which accompanies this distribution, and is available at
@@ -43,6 +43,7 @@
  * David McKnight   (IBM)        - [223461] [Refresh][api] Refresh expanded folder under filter refreshes Filter
  * Martin Oberhuber (Wind River) - [240704] Protect against illegal API use of getRemoteFileObject() with relative path as name
  * Martin Oberhuber (Wind River) - [234026] Clarify IFileService#createFolder() Javadocs
+ * David McKnight   (IBM)        - [272882] [api] Handle exceptions in IService.initService()
  *******************************************************************************/
 
 package org.eclipse.rse.subsystems.files.core.servicesubsystem;
@@ -76,7 +77,6 @@ import org.eclipse.rse.services.clientserver.archiveutils.ArchiveHandlerManager;
 import org.eclipse.rse.services.clientserver.messages.CommonMessages;
 import org.eclipse.rse.services.clientserver.messages.ICommonMessageIds;
 import org.eclipse.rse.services.clientserver.messages.SimpleSystemMessage;
-import org.eclipse.rse.services.clientserver.messages.SystemElementNotFoundException;
 import org.eclipse.rse.services.clientserver.messages.SystemMessage;
 import org.eclipse.rse.services.clientserver.messages.SystemMessageException;
 import org.eclipse.rse.services.files.IFileService;
@@ -1138,7 +1138,7 @@ public class FileServiceSubSystem extends RemoteFileSubSystem implements IFileSe
 		return IFileService.class;
 	}
 
-	public void initializeSubSystem(IProgressMonitor monitor)
+	public void initializeSubSystem(IProgressMonitor monitor) throws SystemMessageException
 	{
 		super.initializeSubSystem(monitor);
 		getFileService().initService(monitor);
diff --git a/rse/plugins/org.eclipse.rse.subsystems.files.core/src/org/eclipse/rse/subsystems/files/core/subsystems/RemoteFileSubSystem.java b/rse/plugins/org.eclipse.rse.subsystems.files.core/src/org/eclipse/rse/subsystems/files/core/subsystems/RemoteFileSubSystem.java
index ad15db9a931..c8d253897d3 100644
--- a/rse/plugins/org.eclipse.rse.subsystems.files.core/src/org/eclipse/rse/subsystems/files/core/subsystems/RemoteFileSubSystem.java
+++ b/rse/plugins/org.eclipse.rse.subsystems.files.core/src/org/eclipse/rse/subsystems/files/core/subsystems/RemoteFileSubSystem.java
@@ -1,5 +1,5 @@
 /*******************************************************************************
- * Copyright (c) 2002, 2008 IBM Corporation and others.
+ * Copyright (c) 2002, 2009 IBM Corporation and others.
  * All rights reserved. This program and the accompanying materials
  * are made available under the terms of the Eclipse Public License v1.0
  * which accompanies this distribution, and is available at
@@ -28,6 +28,7 @@
  * Martin Oberhuber (Wind River) - [218304] Improve deferred adapter loading
  * Martin Oberhuber (Wind River) - [226574][api] Add ISubSystemConfiguration#supportsEncoding()
  * David McKnight (IBM) 		 - [225747] [dstore] Trying to connect to an "Offline" system throws an NPE
+ * David McKnight   (IBM)        - [272882] [api] Handle exceptions in IService.initService()
  *******************************************************************************/
 
 package org.eclipse.rse.subsystems.files.core.subsystems;
@@ -1250,7 +1251,7 @@ public abstract class RemoteFileSubSystem extends SubSystem implements IRemoteFi
 		return rc;
 	} // end runCmd method
 
-	public void initializeSubSystem(IProgressMonitor monitor)
+	public void initializeSubSystem(IProgressMonitor monitor) throws SystemMessageException
 	{
 		super.initializeSubSystem(monitor);
 		// load UI plugin for adapters right after successful connect
diff --git a/rse/plugins/org.eclipse.rse.subsystems.processes.core/META-INF/MANIFEST.MF b/rse/plugins/org.eclipse.rse.subsystems.processes.core/META-INF/MANIFEST.MF
index ae5b6fa4c83..b9b5524b458 100644
--- a/rse/plugins/org.eclipse.rse.subsystems.processes.core/META-INF/MANIFEST.MF
+++ b/rse/plugins/org.eclipse.rse.subsystems.processes.core/META-INF/MANIFEST.MF
@@ -2,7 +2,7 @@ Manifest-Version: 1.0
 Bundle-ManifestVersion: 2
 Bundle-Name: %pluginName
 Bundle-SymbolicName: org.eclipse.rse.subsystems.processes.core;singleton:=true
-Bundle-Version: 3.0.100.qualifier
+Bundle-Version: 3.1.0.qualifier
 Bundle-Vendor: %providerName
 Bundle-Localization: plugin
 Export-Package: 
diff --git a/rse/plugins/org.eclipse.rse.subsystems.processes.core/src/org/eclipse/rse/subsystems/processes/core/subsystem/impl/RemoteProcessSubSystemImpl.java b/rse/plugins/org.eclipse.rse.subsystems.processes.core/src/org/eclipse/rse/subsystems/processes/core/subsystem/impl/RemoteProcessSubSystemImpl.java
index 4665c3736e5..007fefef15b 100644
--- a/rse/plugins/org.eclipse.rse.subsystems.processes.core/src/org/eclipse/rse/subsystems/processes/core/subsystem/impl/RemoteProcessSubSystemImpl.java
+++ b/rse/plugins/org.eclipse.rse.subsystems.processes.core/src/org/eclipse/rse/subsystems/processes/core/subsystem/impl/RemoteProcessSubSystemImpl.java
@@ -1,5 +1,5 @@
 /*******************************************************************************
- * Copyright (c) 2006, 2008 IBM Corporation and others.
+ * Copyright (c) 2006, 2009 IBM Corporation and others.
  * All rights reserved. This program and the accompanying materials
  * are made available under the terms of the Eclipse Public License v1.0
  * which accompanies this distribution, and is available at
@@ -16,6 +16,7 @@
  * Martin Oberhuber (Wind River) - [186128][refactoring] Move IProgressMonitor last in public base classes
  * Martin Oberhuber (Wind River) - [218304] Improve deferred adapter loading
  * David McKnight   (IBM)        - [262930] Remote System Details view not restoring filter memento input
+ * David McKnight   (IBM)        - [272882] [api] Handle exceptions in IService.initService()
  *******************************************************************************/
 
 package org.eclipse.rse.subsystems.processes.core.subsystem.impl;
@@ -95,7 +96,7 @@ public abstract class RemoteProcessSubSystemImpl extends SubSystem implements
 	/* (non-Javadoc)
 	 * @see org.eclipse.rse.core.subsystems.SubSystem#initializeSubSystem(org.eclipse.core.runtime.IProgressMonitor)
 	 */
-	public void initializeSubSystem(IProgressMonitor monitor)
+	public void initializeSubSystem(IProgressMonitor monitor) throws SystemMessageException
 	{
 		super.initializeSubSystem(monitor);
 		// load UI plugin for adapters right after successful connect
diff --git a/rse/plugins/org.eclipse.rse.subsystems.processes.core/src/org/eclipse/rse/subsystems/processes/servicesubsystem/ProcessServiceSubSystem.java b/rse/plugins/org.eclipse.rse.subsystems.processes.core/src/org/eclipse/rse/subsystems/processes/servicesubsystem/ProcessServiceSubSystem.java
index e9c980363f2..43c7be8c6cd 100644
--- a/rse/plugins/org.eclipse.rse.subsystems.processes.core/src/org/eclipse/rse/subsystems/processes/servicesubsystem/ProcessServiceSubSystem.java
+++ b/rse/plugins/org.eclipse.rse.subsystems.processes.core/src/org/eclipse/rse/subsystems/processes/servicesubsystem/ProcessServiceSubSystem.java
@@ -1,5 +1,5 @@
 /********************************************************************************
- * Copyright (c) 2006, 2008 IBM Corporation and others. All rights reserved.
+ * Copyright (c) 2006, 2009 IBM Corporation and others. All rights reserved.
  * This program and the accompanying materials are made available under the terms
  * of the Eclipse Public License v1.0 which accompanies this distribution, and is
  * available at http://www.eclipse.org/legal/epl-v10.html
@@ -17,6 +17,7 @@
  * David Dykstal (IBM) - [217556] remove service subsystem types
  * David McKnight (IBM) - [220524] internalSwitchServiceSubSystemConfiguration -> internalSwitchSubSystemConfiguration
  * Martin Oberhuber (Wind River) - [218304] Improve deferred adapter loading
+ * David McKnight   (IBM)        - [272882] [api] Handle exceptions in IService.initService()
  ********************************************************************************/
 
 package org.eclipse.rse.subsystems.processes.servicesubsystem;
@@ -177,7 +178,7 @@ public class ProcessServiceSubSystem extends RemoteProcessSubSystemImpl implemen
 	/* (non-Javadoc)
 	 * @see org.eclipse.rse.subsystems.processes.core.subsystem.impl.RemoteProcessSubSystemImpl#initializeSubSystem(org.eclipse.core.runtime.IProgressMonitor)
 	 */
-	public void initializeSubSystem(IProgressMonitor monitor)
+	public void initializeSubSystem(IProgressMonitor monitor) throws SystemMessageException
 	{
 		super.initializeSubSystem(monitor);
 		getProcessService().initService(monitor);
diff --git a/rse/plugins/org.eclipse.rse.subsystems.processes.shell.linux/src/org/eclipse/rse/internal/subsystems/processes/shell/linux/LinuxShellProcessService.java b/rse/plugins/org.eclipse.rse.subsystems.processes.shell.linux/src/org/eclipse/rse/internal/subsystems/processes/shell/linux/LinuxShellProcessService.java
index 3c3e7f713e4..29aab2efcd6 100644
--- a/rse/plugins/org.eclipse.rse.subsystems.processes.shell.linux/src/org/eclipse/rse/internal/subsystems/processes/shell/linux/LinuxShellProcessService.java
+++ b/rse/plugins/org.eclipse.rse.subsystems.processes.shell.linux/src/org/eclipse/rse/internal/subsystems/processes/shell/linux/LinuxShellProcessService.java
@@ -1,5 +1,5 @@
 /*******************************************************************************
- * Copyright (c) 2006, 2008 MontaVista Software, Inc. and others.
+ * Copyright (c) 2006, 2009 MontaVista Software, Inc. and others.
  * All rights reserved. This program and the accompanying materials
  * are made available under the terms of the Eclipse Public License v1.0
  * which accompanies this distribution, and is available at
@@ -13,6 +13,7 @@
  * Martin Oberhuber (Wind River) - [226262] Make IService IAdaptable and add Javadoc
  * Martin Oberhuber (Wind River) - [226301][api] IShellService should throw SystemMessageException on error
  * Anna Dushistova  (MontaVista) - [239159] The shell process subsystem not working without the shells subsystem present for the systemType
+ * David McKnight   (IBM)        - [272882] [api] Handle exceptions in IService.initService()
  *******************************************************************************/
 
 package org.eclipse.rse.internal.subsystems.processes.shell.linux;
@@ -187,7 +188,7 @@ public class LinuxShellProcessService extends AbstractProcessService {
         return LinuxShellProcessResources.LinuxRemoteProcessService_name;
     }
 
-    public void initService(final IProgressMonitor monitor) {
+    public void initService(final IProgressMonitor monitor) throws SystemMessageException {
     	super.initService(monitor);
         linuxProcessHelper = new LinuxProcessHelper();
         // initialize username /uid hashmap before getting any process
diff --git a/rse/plugins/org.eclipse.rse.subsystems.shells.core/META-INF/MANIFEST.MF b/rse/plugins/org.eclipse.rse.subsystems.shells.core/META-INF/MANIFEST.MF
index f555e041ba8..888d065bee3 100644
--- a/rse/plugins/org.eclipse.rse.subsystems.shells.core/META-INF/MANIFEST.MF
+++ b/rse/plugins/org.eclipse.rse.subsystems.shells.core/META-INF/MANIFEST.MF
@@ -2,7 +2,7 @@ Manifest-Version: 1.0
 Bundle-ManifestVersion: 2
 Bundle-Name: %pluginName
 Bundle-SymbolicName: org.eclipse.rse.subsystems.shells.core
-Bundle-Version: 3.0.100.qualifier
+Bundle-Version: 3.1.0.qualifier
 Bundle-Activator: org.eclipse.rse.internal.subsystems.shells.core.Activator
 Bundle-Localization: plugin
 Require-Bundle: org.eclipse.ui,
diff --git a/rse/plugins/org.eclipse.rse.subsystems.shells.core/src/org/eclipse/rse/subsystems/shells/core/subsystems/RemoteCmdSubSystem.java b/rse/plugins/org.eclipse.rse.subsystems.shells.core/src/org/eclipse/rse/subsystems/shells/core/subsystems/RemoteCmdSubSystem.java
index 74e68a4f9a5..cb3d1c6a551 100644
--- a/rse/plugins/org.eclipse.rse.subsystems.shells.core/src/org/eclipse/rse/subsystems/shells/core/subsystems/RemoteCmdSubSystem.java
+++ b/rse/plugins/org.eclipse.rse.subsystems.shells.core/src/org/eclipse/rse/subsystems/shells/core/subsystems/RemoteCmdSubSystem.java
@@ -1,5 +1,5 @@
 /*******************************************************************************
- * Copyright (c) 2002, 2008 IBM Corporation and others.
+ * Copyright (c) 2002, 2009 IBM Corporation and others.
  * All rights reserved. This program and the accompanying materials
  * are made available under the terms of the Eclipse Public License v1.0
  * which accompanies this distribution, and is available at
@@ -21,6 +21,7 @@
  * Martin Oberhuber (Wind River) - [218304] Improve deferred adapter loading
  * David McKnight   (IBM)        - [230285] [shells] Remote shells should be restored on quit and re-start of RSE
  * David McKnight   (IBM)        - [252708] Saving Profile Job happens when not changing Property Values on Connections
+ * David McKnight   (IBM)        - [272882] [api] Handle exceptions in IService.initService()
  *******************************************************************************/
 
 package org.eclipse.rse.subsystems.shells.core.subsystems;
@@ -82,7 +83,7 @@ public abstract class RemoteCmdSubSystem extends SubSystem implements IRemoteCmd
 		_cmdShells = new ArrayList();
 	}
 
-	public void initializeSubSystem(IProgressMonitor monitor) {
+	public void initializeSubSystem(IProgressMonitor monitor) throws SystemMessageException {
 		super.initializeSubSystem(monitor);
 		// load UI plugin for adapters right after successful connect
 		Platform.getAdapterManager().loadAdapter(new RemoteOutput(null, ""), "org.eclipse.rse.ui.view.ISystemViewElementAdapter"); //$NON-NLS-1$ //$NON-NLS-2$
diff --git a/rse/plugins/org.eclipse.rse.subsystems.shells.core/src/org/eclipse/rse/subsystems/shells/core/subsystems/servicesubsystem/ShellServiceSubSystem.java b/rse/plugins/org.eclipse.rse.subsystems.shells.core/src/org/eclipse/rse/subsystems/shells/core/subsystems/servicesubsystem/ShellServiceSubSystem.java
index 47d3ffc2dec..5346e3b868c 100644
--- a/rse/plugins/org.eclipse.rse.subsystems.shells.core/src/org/eclipse/rse/subsystems/shells/core/subsystems/servicesubsystem/ShellServiceSubSystem.java
+++ b/rse/plugins/org.eclipse.rse.subsystems.shells.core/src/org/eclipse/rse/subsystems/shells/core/subsystems/servicesubsystem/ShellServiceSubSystem.java
@@ -1,5 +1,5 @@
 /********************************************************************************
- * Copyright (c) 2006, 2008 IBM Corporation and others. All rights reserved.
+ * Copyright (c) 2006, 2009 IBM Corporation and others. All rights reserved.
  * This program and the accompanying materials are made available under the terms
  * of the Eclipse Public License v1.0 which accompanies this distribution, and is
  * available at http://www.eclipse.org/legal/epl-v10.html
@@ -20,6 +20,7 @@
  * David McKnight (IBM) - [220524] internalSwitchServiceSubSystemConfiguration -> internalSwitchSubSystemConfiguration
  * Martin Oberhuber (Wind River) - [226301][api] IShellService should throw SystemMessageException on error
  * Martin Oberhuber (Wind River) - [218304] Improve deferred adapter loading
+ * David McKnight   (IBM)        - [272882] [api] Handle exceptions in IService.initService()
  ********************************************************************************/
 
 package org.eclipse.rse.subsystems.shells.core.subsystems.servicesubsystem;
@@ -239,7 +240,7 @@ public final class ShellServiceSubSystem extends RemoteCmdSubSystem implements I
 		return IShellService.class;
 	}
 
-	public void initializeSubSystem(IProgressMonitor monitor)
+	public void initializeSubSystem(IProgressMonitor monitor) throws SystemMessageException
 	{
 		super.initializeSubSystem(monitor);
 		getShellService().initService(monitor);
diff --git a/rse/plugins/org.eclipse.rse.subsystems.terminals.core/src/org/eclipse/rse/subsystems/terminals/core/TerminalServiceSubSystem.java b/rse/plugins/org.eclipse.rse.subsystems.terminals.core/src/org/eclipse/rse/subsystems/terminals/core/TerminalServiceSubSystem.java
index 05eed58d48c..f791a1f00ae 100644
--- a/rse/plugins/org.eclipse.rse.subsystems.terminals.core/src/org/eclipse/rse/subsystems/terminals/core/TerminalServiceSubSystem.java
+++ b/rse/plugins/org.eclipse.rse.subsystems.terminals.core/src/org/eclipse/rse/subsystems/terminals/core/TerminalServiceSubSystem.java
@@ -1,5 +1,5 @@
 /********************************************************************************
- * Copyright (c) 2008 MontaVista Software, Inc. and others.
+ * Copyright (c) 2008, 2009 MontaVista Software, Inc. and others.
  * All rights reserved. This program and the accompanying materials
  * are made available under the terms of the Eclipse Public License v1.0
  * which accompanies this distribution, and is available at
@@ -12,6 +12,7 @@
  * Martin Oberhuber (Wind River) - [228577] [rseterminal] Further cleanup
  * Anna Dushistova  (MontaVista) - [227569] [rseterminal][api] Provide a "generic" Terminal subsystem
  * Anna Dushistova  (MontaVista) - [257638] [rseterminal] Terminal subsystem doesn't have service properties
+ * David McKnight   (IBM)        - [272882] [api] Handle exceptions in IService.initService()
  ********************************************************************************/
 
 package org.eclipse.rse.subsystems.terminals.core;
@@ -30,6 +31,7 @@ import org.eclipse.rse.core.subsystems.ICommunicationsListener;
 import org.eclipse.rse.core.subsystems.IConnectorService;
 import org.eclipse.rse.core.subsystems.ISubSystemConfiguration;
 import org.eclipse.rse.core.subsystems.SubSystem;
+import org.eclipse.rse.services.clientserver.messages.SystemMessageException;
 import org.eclipse.rse.services.terminals.ITerminalService;
 import org.eclipse.rse.subsystems.terminals.core.elements.TerminalElement;
 import org.eclipse.swt.widgets.Display;
@@ -195,7 +197,7 @@ public class TerminalServiceSubSystem extends SubSystem implements
 				ISystemResourceChangeEvents.EVENT_COMMAND_SHELL_REMOVED, null));
 	}
 
-	public void initializeSubSystem(IProgressMonitor monitor) {
+	public void initializeSubSystem(IProgressMonitor monitor) throws SystemMessageException {
 		super.initializeSubSystem(monitor);
 		getConnectorService().addCommunicationsListener(this);
 	}
diff --git a/rse/plugins/org.eclipse.rse.ui/subsystems/org/eclipse/rse/core/subsystems/SubSystem.java b/rse/plugins/org.eclipse.rse.ui/subsystems/org/eclipse/rse/core/subsystems/SubSystem.java
index b1dab18d77d..623d08cd563 100644
--- a/rse/plugins/org.eclipse.rse.ui/subsystems/org/eclipse/rse/core/subsystems/SubSystem.java
+++ b/rse/plugins/org.eclipse.rse.ui/subsystems/org/eclipse/rse/core/subsystems/SubSystem.java
@@ -1,5 +1,5 @@
 /********************************************************************************
- * Copyright (c) 2002, 2008 IBM Corporation and others. All rights reserved.
+ * Copyright (c) 2002, 2009 IBM Corporation and others. All rights reserved.
  * This program and the accompanying materials are made available under the terms
  * of the Eclipse Public License v1.0 which accompanies this distribution, and is
  * available at http://www.eclipse.org/legal/epl-v10.html
@@ -46,6 +46,7 @@
  * Don Yantzi       (IBM)        - [244807] Delay connecting if resolving filters while restoring from cache
  * David McKnight   (IBM)        - [226787] [services] Dstore processes subsystem is empty after switching from shell processes
  * David McKnight   (IBM)        - [262930] Remote System Details view not restoring filter memento input
+ * David McKnight   (IBM)        - [272882] [api] Handle exceptions in IService.initService()
  ********************************************************************************/
 
 package org.eclipse.rse.core.subsystems;
@@ -2421,8 +2422,9 @@ implements IAdaptable, ISubSystem, ISystemFilterPoolReferenceManagerProvider
 	 *            during long-running operation. Cancellation is typically not
 	 *            supported since it might leave the system in an inconsistent
 	 *            state.
+	 * @throws SystemMessageException if an error occurs during initialization.          
 	 */
-	public void initializeSubSystem(IProgressMonitor monitor) {
+	public void initializeSubSystem(IProgressMonitor monitor) throws SystemMessageException {
 		_isInitialized = true;
 	}
 
@@ -3401,7 +3403,12 @@ implements IAdaptable, ISubSystem, ISystemFilterPoolReferenceManagerProvider
 		if (newConnectorService.isConnected()){
 			// make sure that the new service is initialized properly
 			// since we're already connected and normally it's done as part of connect
-			initializeSubSystem(new NullProgressMonitor());
+			try {
+				initializeSubSystem(new NullProgressMonitor());
+			}
+			catch (SystemMessageException e){
+				SystemBasePlugin.logError(e.getMessage(), e);
+			}
 		}
 		
 
diff --git a/rse/tests/org.eclipse.rse.tests/src/org/eclipse/rse/tests/internal/testsubsystem/TestSubSystem.java b/rse/tests/org.eclipse.rse.tests/src/org/eclipse/rse/tests/internal/testsubsystem/TestSubSystem.java
index e049edf2989..fc9957e0d65 100644
--- a/rse/tests/org.eclipse.rse.tests/src/org/eclipse/rse/tests/internal/testsubsystem/TestSubSystem.java
+++ b/rse/tests/org.eclipse.rse.tests/src/org/eclipse/rse/tests/internal/testsubsystem/TestSubSystem.java
@@ -1,5 +1,5 @@
 /*******************************************************************************
- * Copyright (c) 2006, 2008 Wind River Systems, Inc. and others.
+ * Copyright (c) 2006, 2009 Wind River Systems, Inc. and others.
  * All rights reserved. This program and the accompanying materials
  * are made available under the terms of the Eclipse Public License v1.0
  * which accompanies this distribution, and is available at
@@ -10,6 +10,7 @@
  * Martin Oberhuber (Wind River) - [182454] improve getAbsoluteName() documentation
  * Martin Oberhuber (Wind River) - [186128][refactoring] Move IProgressMonitor last in public base classes
  * Martin Oberhuber (Wind River) - [218304] Improve deferred adapter loading
+ * David McKnight   (IBM)        - [272882] [api] Handle exceptions in IService.initService()
  *******************************************************************************/
 package org.eclipse.rse.tests.internal.testsubsystem;
 
@@ -20,6 +21,7 @@ import org.eclipse.core.runtime.IProgressMonitor;
 import org.eclipse.rse.core.model.IHost;
 import org.eclipse.rse.core.subsystems.IConnectorService;
 import org.eclipse.rse.core.subsystems.SubSystem;
+import org.eclipse.rse.services.clientserver.messages.SystemMessageException;
 import org.eclipse.rse.tests.testsubsystem.TestSubSystemContainerNode;
 import org.eclipse.rse.tests.testsubsystem.TestSubSystemNode;
 import org.eclipse.rse.tests.testsubsystem.interfaces.ITestSubSystem;
@@ -47,7 +49,7 @@ public class TestSubSystem extends SubSystem implements ITestSubSystem {
 	/* (non-Javadoc)
 	 * @see org.eclipse.rse.core.subsystems.SubSystem#initializeSubSystem(org.eclipse.core.runtime.IProgressMonitor)
 	 */
-	public void initializeSubSystem(IProgressMonitor monitor) {
+	public void initializeSubSystem(IProgressMonitor monitor) throws SystemMessageException {
 		super.initializeSubSystem(monitor);
 		TestSubSystemContainerNode parent0 = new TestSubSystemContainerNode("0"); //$NON-NLS-1$
 		TestSubSystemContainerNode child0 = new TestSubSystemContainerNode("0:0"); //$NON-NLS-1$