Not sure what you're using for development in terms of
IDE. Assuming you are using and IDE this is what I do.
Create a lib directory inside the project directory, by sructure looks like:
In the lib directory goes the jar I'm using, if a jar requires other jars I create a subdir for that (just for me to keep things straight in case I want to add/remove/change something).
During development let the IDE handle the classpath issues for compilation. When you get ready to release create a manifest file setting all the jars in the lib directory. When you do a release you can create a jar from source and put it and the lib directory into a zip. The user then only has to unzip and doubleclick the jar. Of course there are more elegant, though more difficult, installation methods.
If you are using a text editor dealing with the classpath becomes more tedious.
I tend to stay away from putting jars into the java\jre\lib\ext folder. It keep me from running into the problem of 'works on my dev machine, but not anywhere else'.