The source for V. 1.1 is available now. This provides connection management, administration, servlets, etc. Its a framework; the Java Web Server was built using the JavaServer toolkit.
A new item is JavaServer Pages (JSP). This allows mixing Java source directly inside HTML pages. The JSP is parsed on the server side into a servlet. The browser only sees HTML. You can pass values into scripts and use JavaBeans directly, setting their properties inside the HTML page. You can even use CGI variables to directly change JavaBean properties without any extra code. Look at http://java.sun.com/jdc/earlyAccess/ for more details.
Then the discussion started on the Embedded Java Server, which servers applets to embedded devices, like the Java Ring. I left at that, as I didn't see a use for it at the bank right now. I went back to the exhibit floor and shmoosed some more.