I may be naturally optimistic, but my understanding of this is that the standard Netscape package will still include Java support, but users will have the ability to update just the JVM, or specify the use of an external one.
This should give the best of both worlds: Better Applet/JS/Browser integration than with the current plugin; no need to install a new "plugin" if you already have a JDK or JRE for the latest version of Java;
applets can properly take advantage of version features by specifying their Java version