Whe I build a project in Netbeans, it just automatically created a jar for me. I could've sworn there was a menu option that said "build jar", but I can't seem to find it now.

JCreator PRO and BlueJ

and on what grounds do you recommend the two IDEs that are considered almost universally to be at the very bottom of the pile when it comes to quality, usability, and everything else except crappiness?

I downloaded JCreater the other day and deleted it 50 seconds later. I'm no pro at java but i'm not an absolute beginner either. I've settled on use Notepad++ to edit and command line to compile and run. A simple bat file takes care of compiling and running for me quite easily. I've got Netbeans installed for a quick gui build, which I then copy and paste into an existing project, or just add the gui as a class.

All the IDEs i've used so far create so much junk code it's unbelievable.

All depends on how you use them
Personally I hardly use most code generation "features" at all, except to create some skeletons for classes and methods.

I've settled down on IntelliJ. By far the best I've ever used (not free of course, but cheap enough that you gain the investment back in increased productivity very rapidly).

For small to moderately-sized projects, I've stuck with Emacs and a terminal emulator.

For larger projects, I found Eclipse was too....busy, and I switched to Netbeans recently and am quite happy with it.

I like Netbeans to since it's very easy to get started when working with a Java GUI program.

I come from VB6, and Netbeans is so far the closest thing I've seen to it.

So change the default templates?

wont' do much if the code is generated on the fly rather than pulled from some file template...

The generators suck. Mind it's very hard to generate halfway decent code, even harder to interpret code humans have written and mix it with the code you're generating.

My experience with NetBeans is that the generated code when building GUIs in particular is extremely difficult to read and subsequently maintain. For a beginner I would recommend something like jEdit. While technically not an IDE it has several downloadable plugins through its sophisticated plugin manager that add functionality to make it IDE-like, but still encourages students to write their own code. After all, it is the only real way to learn.
jEdit is free to use and has syntax highlighting for a variety of languages, but is designed specifically with java in mind. Check out their website for further details.