Why Java won't take the GPL route
One thing's clear to me--it won't be GPLv3. I know Jonathan Schwartz says that "using a GPL licence is very much *on* the table", but the DRM restrictions famously pointed out by Linus Torvalds will almost certainly put the kibosh on that. I suppose they could use GPLv2, but it would be very unusual for a large contribution like the JDK to be stuck at a back-level of the licence (Linux is the only other example that comes to mind).
The problem is that GPLv3 section 3 (2nd draft) says "no permission is given for modes of conveying that deny users that run covered works the full exercise of the legal rights granted by this Licence". RMS wants to make sure users can switch the software in their hardware devices that run GPL code, to prevent vendor lock-in. But this is the bread and butter of mobile phone makers. Most won't even allow you to make your own ring tones, for goodness sakes.
Now, whether that's a user-friendly thing to do is beside the point--this is the "pragmatic" open source column, after all. Mobile phones are a huge market for Java, and mobile-phone makers have alternatives to Java they could use, if Java adopted a licence that forced them to change their business model. Therefore I would be very surprised if Sun adopted this licence for Java.
In my opinion, RMS's stance, while commendable in the abstract, falls down under practical considerations. For example, could GPL code be used in voting machines? If I'm reading GPLv3 correctly, a voting machine maker could not lock down covered software in the machine to prevent modification. But as recent voting security problems have shown, this kind of lock down is absolutely necessary to preserve the integrity of the vote.
So what will Sun use? My bet is on CDDL, which is a perfectly reasonable OSI-approved licence based on MPL (the Mozilla licence). Of course, my favourite is still EPL (the Eclipse Public License), but Sun's about as likely to use anything with "Eclipse" in the name as RMS is likely to accept a job at Microsoft.