I'm a card-carrying Java-hater (haha only serious) and Lisper, I was pretty damn impressed by this the last time I watched Notch working on a LD thing. I looked it up this time and found out that Eclipse calls it "hot code replacement"
There are some limitations (can only change the body of an existing method) so it's not quite as dynamic as Lisp + Emacs + SLIME, but it's still pretty cool. I wish Dalvik supported it somehow because from what I can tell, you can't do this with code running on an Android emulator.
You can absolutely modify the body of not only an existing method but the very method you are currently breakpointed in. When you do that, Eclipse drops the frame, which means it restarts the method from scratch.
The DCEVM is a patched version of JDK 7 that allows the code reloading mechanism in the JVM to swap nearly arbitrary changes. I'd highly recommend it if you're trying to do any dynamic reloading of Java code during development. http://java.net/projects/dcevm
http://wiki.eclipse.org/FAQ_What_is_hot_code_replace%3F
There are some limitations (can only change the body of an existing method) so it's not quite as dynamic as Lisp + Emacs + SLIME, but it's still pretty cool. I wish Dalvik supported it somehow because from what I can tell, you can't do this with code running on an Android emulator.