Joshua Bloch of Effective Java and Collections fame has given a powerful and in many ways depressing talk. He has probably nailed the coffin shut on BGGA with this almost clinical dissection of the flaws of grafting Closures into Java. However he has also indicated how Java is effectively at the end of the line. Sun, for perfectly good reasons, wants to maintain backwards compatibility and not throw the kitchen sink into the language. The JCP does not have to stick with that approach but this talk does effectively say that there is a limit to what can be done while keeping the language recognisably Java.
The mention of Scala is significant because a lot of the things that people want in Java are available there and other features are in JRuby. Trying to create one language with universal appeal is going to be impossible. The reason I feel depressed about all of this is because I have working with Java for years now. I really had to fight to switch to 100% Java and now its time to move on again!
It would be easier to do that if there was something that was obviously better but currently all of the candidates for a potential successor have lacked that Eureka factor where you see something that is going to make programming easier and better and your working life a whole lot more fun. So far only Scala has really come close.