Hiya folks, as something of a pundit on the nature of Java on embedded devices, I should toss in a couple of comments here.
Firstly, you should know I am massively biased about Java support, as all our games are written in Java. They do unfortunately use a bit more RAM than is available on the RPi but that is largely a function of the large quantity of graphics and sound in them and a fairly desktop-oriented approach to RAM usage (that is: we rely on a swapfile).
Anyway - the long and the short of Java support on ARM is this: there is only one worthwhile VM available for ARM, which is made and maintained exclusively by Oracle. JDK6 Embedded comes in both headless and full AWT versions, although only the client version of the Hotspot compiler is implemented. I've actually used this very VM on a prototype board housing a 700MHz Tegra SOC and it was more or less as fast as a desktop CPU of the same clockspeed running Java; that is to say, about 50% or so of the raw computing power of C++ on average, which is absolutely adequate to do games such as Quake3 at 60Hz (as easily fast enough for our smaller games).
Despite having fairly extensive tendrils inveigling their way through Sun Microsystems I've been unable to convince Oracle to license me their Java 6 JRE on reasonable terms for my own special purposes, but it is possible that RPi will manage to convince Oracle of the merits of getting Java onto this device and maybe come up with an affordable licensing scheme for it.
The other alternatives I've investigated are the IcedTea/Shark OpenJDK efforts but these are basically experimental and involve hair pulling, swearing, etc. and generally wasting your time. Java, for the developer, is about stuff just working and working properly, and if you have to involve yourself in the horrible world of C then it's essentially a big fail.
The OP is almost certainly aware of the benefits of having Java on the device, but in case RPi aren't so familiar with why it's so good: Java is the new BASIC. Any fool can write it (and write it anywhere!). It's fantastic and teaches proper programming. It's not as fast as C but most of us would rather something just compiled and ran without the aforementioned hair loss and expletives.
Also: we have LWJGL compiled for ARM and OpenGL ES. If only we had a JVM...