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External tool configurations and external tool project builders from version 2.0 and 2.1 need to be migrated to launch configurations. External tool configurations, stored in the metadata as externaltools.xml (2.0) or .xtools/*.xtool (2.1), can be moved to launch configurations that reside in the metadata. I believe we can do this essentially at startup. External tool project builders should be interpreted as configurations at runtime, and stored as configurations only when they are edited. This should allow people who want to share a project between users on Eclipse 2.0 and Eclipse 2.1 to coexist. We should also consider prompting the user before converting the builders and explaining that they will not be compatible with older versions of Eclipse if they are edited.
For now, we are electing to only migrate project builders. The data for the old external tools will be left in the metadata in case we change our minds in the future.
Won't fix migration of tool configurations. Bug 26415 deals with migrating project builders.