Since Java 7 is going to use the new G1 garbage collection by default is Java going to be able to handle an order of magnitude larger heap without supposed \"devastating\" G
Azul's CTO, Gil Tene, has a nice overview of the problems associated with Garbage Collection and a review of various solutions in his Understanding Java Garbage Collection and What You Can Do about It presentation, and there's additional detail in this article: http://www.infoq.com/articles/azul_gc_in_detail.
Azul's C4 Garbage Collector in our Zing JVM is both parallel and concurrent, and uses the same GC mechanism for both the new and old generations, working concurrently and compacting in both cases. Most importantly, C4 has no stop-the-world fall back. All compaction is performed concurrently with the running application. We have customers running very large (hundreds of GBytes) with worse case GC pause times of <10 msec, and depending on the application often times less than 1-2 msec.
The problem with CMS and G1 is that at some point Java heap memory must be compacted, and both of those garbage collectors stop-the-world/STW (i.e. pause the application) to perform compaction. So while CMS and G1 can push out STW pauses, they don't eliminate them. Azul's C4, however, does completely eliminate STW pauses and that's why Zing has such low GC pauses even for gigantic heap sizes.
And to correct a statement made in an earlier answer, Zing does not require any changes to the Operating System. It runs just like any other JVM on unmodified Linux distros.