Hi,
I got it running.
The WebDiag tools is worth gold 
There is a section, that you can trace on SPNego events.
It looks like with the new SPnego, that was shipped out with NW 7.0 SP26, doesn't need the krb5principalname in the J2EE configuration.
In my case, SPNego just needing the keys from AD (generated with Java 6.x, via ktab program) and the setting to be set for "Simple" in SPNego configuration, as username in AD and SAP are the same (Log-on ID).
Best regards
Carlos