There's a small presence at JavaOne... but an advanced research project at Sun, "Project Caroline", is gaining some *real* interest at the conference.
Project Caroline is a hosting platform designed to support SaaS providers in the development and delivery of dynamically scalable Internet-based services. The key idea around the platform is to present a pool of distributed compute, storage, and networking resources as a single system, and to provide developers with a unified platform for allocating and controlling these resources. Developers can then create services and applications that automatically flex their own use of these resources.
There's a Pod #981 in the Pavilion with a cool demo of an application that deploys itself (allocates VMs, mounts FS, sets up networking rules/load balancing) onto the platform. It automatically scales up (and down) based on simulated client load. You can also stage a new version (so as not to interrupt the running production application) in the same environment, and do remote debugging. It's pretty cool.
There's a session tomorrow (Wed) morning (9:35am, Moscone Esplanade 301): Project Caroline: Platform as a Service, at Your Service, for Your Service .
There's also a brief web page