Looks like Jetty team wanted to do some spring cleaning between versions 6 and 7, and it looks as if one useful system property, "jetty.lib" either does not exist, does not work, or just has changed in an unspecified way so as to make my jetty 6 set up work easily with Jetty 7.
I tried searching through Jetty 7 docs, but about the only reference I saw was that "some commonly used properties (such as "jetty.home") still work as they used to".
So, what am I missing? I really would want to avoid messing with things within Jetty distribution dirs (otherwise I could -- and maybe I have to? -- just use JETTY_BASE/lib/ext), and that's what "jetty.lib" was useful for.