I access the projects settings through the preferences context menu of the project (name node).
Please take a look a the video below.
http://hostj2me.cliqcafe.com/files/2059/bbsetup.wmv I walk through my project and settings. I am not an expert on Blackberry development. My project involve porting a MIDLet that I created for the E61 using eclipse to the Blackberry JDE targeting the 8100.
You can see more videos in which I use the JDE on
mobox.cliqcafe.com or
hostj2me.cliqcafe.com.
Excusing the lack of a pop filter and half-sleep narrations, they may still not be helpful because the videos start with the emulator already launched.
I do have version 4.1 installed. If I am able to find the time today I will check to see if I can get the 4.2 project running in 4.1.
Have you had any luck getting help in the RIM (Blackberry) developer forums?