What is the best way to find the users home directory in Java?

Actually with Java 8 the right way is to use:

System.getProperty("user.home");

The bug JDK-6519127 has been fixed and the "Incompatibilities between JDK 8 and JDK 7" section of the release notes states:

Area: Core Libs / java.lang

Synopsis

The steps used to determine the user's home directory on Windows have changed to follow the Microsoft recommended approach. This change might be observable on older editions of Windows or where registry settings or environment variables are set to other directories. Nature of Incompatibility

behavioral RFE

6519127

Despite the question being old I leave this for future reference.

The bug you reference (bug 4787391) has been fixed in Java 8. Even if you are using an older version of Java, the System.getProperty("user.home") approach is probably still the best. The user.home approach seems to work in a very large number of cases. A 100% bulletproof solution on Windows is hard, because Windows has a shifting concept of what the home directory means.

If user.home isn't good enough for you I would suggest choosing a definition of home directory for windows and using it, getting the appropriate environment variable with System.getenv(String).