Is this really impossible with the EULA?
It seems to me that the only thing confirmed dead in light of the SDK EULA is Sun's ability to port the stupid Java launcher. Who needs it? Java is a language and a framework for writing apps. Does the act of launching Java on your mobile to then launch another application seem rational to anyone? Sun can release Java as a framework or wrapper for iPhone developers looking to code in Java. In this scheme, Apple still controls the distribution. iPhone users are finally rid of the braindead Java launcher. Maybe Apple will even allow them to install Java into some common location so every Java app doesn't load a brand new copy of the framework and runtime.