This bug makes the game virtually unplayable on a server. There is no way to break the cycle if there is no one around to help, and in certain cases you are not even teleported back to the correct coordinates, causing you to die and lose your items.
Hey! I found a fix. You need to set the default program that opens .jars to javaw; it turns out that this was a permissions bug, as it will ask if you would like to allow access or not.
I haven't personally gotten this error yet in 1.7, but I figured I'd update the post as I saw you guys were.
I had to switch back to the 13w43a .exe in order to play with the new features. I have a suspicion that this might just be a simple Java permission bug, but Java has full permissions on my system. I am hoping that a .exe gets released soon for 1.7 .
@JimmyZJX
Here's a log of the incident using your jar:
https://drive.google.com/file/d/0B-2DQ3g04GV0cExURThGLWZ5UXM/view?usp=sharing
For me the bug is extremely persistent—it's more rare that it doesn't happen.
EDIT: This is when I enter nether portals. This only seems to happen when I start in the nether and go from the nether to the overworld. It doesn't happen (or at least happens very rarely) when I enter the nether from the overworld.