I tried to change my tabs size from the default 8 to 4 and it all seemed broken. My tabs became 2 spaces. I did some searching only to find that many developers have even reverted back to Netbeans 6.0.
My settings were changed as follows:
Tools -> Options -> Editor -> Indentation
I changed "Number of Spaces per Indent" to 4 and "Tab Size" to 4
The only way I got it to work was a complete shutdown of Netbeans. Simple enough but caused me loads headache (and I nearly replaced Netbeans 6.1 with an older version)