JDiagram version 4.0.2 adds various customer-requested features and fixes several bugs:

ContainerNode improvements
~ child nodes are now drawn by their containers; when containers overlap, the children of a lower container cannot appear in front of the upper container anymore;
~ the ClipChildren property specifies whether to clip child items to container’s boundaries;
~ the ZIndex property  no longer changes automatically when dropping nodes into a container;
~ the Visible property of child items no longer changes when folding or unfolding containers; this lets you keep invisible items inside containers;
~ when selection including a container and its child node is dropped into another container, the child node now remains in its original container;

Miscellaneous
~ the ScrollZoneSize property of DiagramView can be used to specify the size of the area near the control edges that starts auto-scrolling.
~ improved placement of link labels along shorter link segments.
The arrangeLinkLabels method rearranges link labels whose AutoArrange flag is set.
~ DiagramLink.intersects checks whether two links intersect.
~ the hitTest method determines whether a diagram item or any of its child items contain the specified point.
~ the getFlatItemList returns a list of all TreeViewNode items.
~ fixed selection handles repaint bug http://mindfusion.eu/Forum/YaBB.pl?num=1370470277
~ fixed cascading link auto-orientation bug http://mindfusion.eu/Forum/YaBB.pl?num=1372994107

If anyone is interested in trying the beta version, please download this archive containing the updated jar and help files:
https://mindfusion.eu/_beta/JDiagram402.zip

Any comments, questions and general feedback are welcome.