We had this symptom too. Also, our install got so hosed up we couldn’t even open Eclipse any more. Lot’s of errors in the log indicating it couldn’t find various MyEclipse plugins, OSGi errors, etc.
We tried this 2 ways — using the Eclipse update facility to to to 3.2.1, and also just installing 3.2.1 and then MyEclipse 5.0.1. Neither was stable. Opening a JSP created by the wizard failed in both cases.
We’re on Windows XP for developer desktops….
Warning to all — MyEclipse 5.0.1 does not appear to be compatible with Eclipse 3.2.1!!