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First, you need to know that your plugin will get installed run either way, although Eclipse claims that performance might differ (surprisingly, JAR-ed plugins are supposed to be better =>
http://www.eclipsezone.com/eclipse/forums/m91980917.html#91980917.
If that's all you want to do, the choice is entirely up to you.
However, some plugins are intended to be used by other plugins; such plugins expose packages to the clients. You must create a JAR file for a plugin that exposes packages, so that Eclipse's Plug-in Development Environment can locate the exported classes.
Note: if your plugin uses an external library, put it into edu.stanford.slac.external plugin and make that plugin required by your plugin.
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SWT
How can I change the background/foreground color of a button?
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