First, I must express my congratulations to the JRuby guys at the news that they have been hired to work fulltime on JRuby by Sun. This is great news as we may finally see a high quality Ruby VM for Java. The reaction on the Groovy list has ranged from the hysterical to the dismissive.
What do I personally think it means to Groovy? Well not a great deal actually. Groovy already has tight integration with Java and compiles to byte code hence its performance and integration is excellent. The work here lies with the JRuby guys.
In addition, I think this is a great thing for the Java community. Java has always been about offering choice to its developers, over in Ruby-land when you're looking for a web framework you have Rails and, umm... Rails. If JRuby gets Rails working on Java then it is just another choice amongst such great frameworks like WebWork, Cocoon, Rife and Grails.
And what about Grails? Well Grails' goals have always been very different, sure it was about creating a framework that had the essence of Rails, but it is the technology stack that it is built on that is important. Grails provides tight integration with Spring, Hibernate, SiteMesh and Quartz. Together they represent some of the most popular Java stacks out there that share a huge user base. The Spring+Hibernate stack is probably the most frequently used combination in building Java apps today and the goal of Grails was to create a framework that leveraged this allowing you to mix approaches.
We're also targeting tighter EJB3 support and in the future JPA support, so the direction here is very different to JRuby on Rails, which re-invents everything from scratch (controller layer, ORM layer etc.).
Overall I think this is great news and can only help improve the offering on the JVM and extend the choice available to Java developers.