I have the following NumLock questions:

The SunRay1 server is running under Solaris 7.

Q1. On Sunray server reboot: I am at the CDE login window, numlock is
turned on. I then power-cycle the appliance (ctl-moon), system cycles
through, NumLock is turned off for about 3 seconds, dtlogin comes up, 
and then NumLock is on.

A1. This is correct behavior. When you reset the Sun Ray unit, the
session was temporarily disconnected and then reconnected. When it
reconnected, it made the NumLock of the unit match what was specified
in the session. The lock state is maintained for the session by the X
server, which has continued to run during the disconnection.  This is
similar to what happens when you hot-desk to a new unit.

Q2.  I login on the Sunray appliance. NumLock is on. I log out and 
I am back at the CDE login window. NumLock is turned off.

A2. This is also correct behavior. The NumLock state is maintained for
the session in the X server. When you log out, your X server exits,
and a new one starts. The new one sets the locks to the default
settings (i.e. off).

Q3. What is happening between reboot vs log out?  Why does NumLock
come back on during a reboot, but not on a logout?

A3. Reboot of the unit does not terminate any applications or the X
server, and the session state is maintained (including locks). The
session is just disconnected.  [In your case, the login window is
disconnected and then reconnected and the state is restored.]  Logout
terminates all the applications and the X server, and the session
state is reset to the defaults. There is not a disconnect from the
unit, just a short period with no services in the session.  The
problem seems to stem from the fact that the user was at a login
window in both cases when this was done. The important point is that
resetting the Sun Ray unit has no effect on the server applications
(including the login window). It is not like resetting a workstation
or PC. The same things will happen to the locks if you are already
logged in and try the reset vs. logout.

Q4. I am told that Xwindows specifications written by MIT are vendor
specific applications and that Sun chooses not to have the NumLock key
activated, so users are confused when they see the scenario described
above.

A4. Tthe lock key state is not maintained across X server termination
even on workstations.