Just a quick question here, should the controls be inverted for the HelloWorld demo, i.e. up is down and down is up. I'm running jME-2.0.1-stable using NetBeans for windows. Thanks in advance.
I don't know about the inverted controls that you are experiencing… but, the SimpleGame, the one which is implemented in HelloWorld.java, has an innate FirstPersonHandler… you can use mouse to look around and use the WASD keys to walk around the scene
You know… This was question for me also. 
It seems, that you can make a 360 degree rotation with mouse without notation of it.
So, you can be in upside-down position, while FirstPersonHandler makes all movement in absolute coordinate system.
When you press up, game moves camera up in world coordinates - down for you in rotated state.
well… that's the way in jme's SimpleGame… it is designed to have these innate handlers for both mouse and keyboard so you would be able to explore the scenegraph with full control of the camera(for terrain testing, action simulations and some other purposes where you would not yet need a static overhead camera whatsoever)…
If you would want play around the configuration of controls…try detaching all of the handlers that are innate in SimpleGame in your own app… and configuring your own keyboardlook and mouselook handlers…
try scanning com.jme.input.KeyboardLookHandler.java