I've found that whenever I use html tags within a JLabel, it will wordwrap when resized, but when using a JLabel without html and it is resized to smaller than its preferred size it cuts off the end and add an ellipsis "...".
If you are using html tags and your JLabel is still not word wrapped I suspect that your layout manager is not resizing the JLabel below its preferred size. Some layout managers resize the components and some just clip the edges off.
Usually that error comes up when one of the VMs cannot find a class it needs to unmarshall the serialized data. Are you running both VMs on the same machine? If not, you probably don't want to use a CODEBASE with a file URI.
RMI looks in the VM classpath first then checks the CODEBASE.
Double check the runtime classpaths for both VMs and make sure that all the classes you pass between the two VMs are present ( don't forget classes that are referenced inside other classes ).