JRuby is, as you might guess by the name, a port of the Ruby interpreter (which is written in C) to Java. Some benefits of this include easy access to Java libraries in addition to Ruby ones, but the main benefit seems to be the additional deployment options. In an organization where Java is a standard deployment platform, it can be easier to get a project written in Ruby through Congress if it’s able to run in a JVM environment that the company is already comfortable with.
As you can imagine, Sun is one of those companies. As Java’s creators, they’ve got an enormous investment in Java, but they’ve also been investing heavily in Open Source projects, and they hired the 2 lead authors of the JRuby project to work on it full-time as Sun employees. Now Sun has allowed a rewrite of an existing codebase in JRuby and Rails.
That’s some bleeding-edge risk there, but it looks like it’s going well so far. I certainly wouldn’t go that far yet, but I’m happy to see other Ruby interpreters gaining traction.