You could try my essence jcf library which does this. When running in debug you can have the source written to a file so you can step into the code. Otherwise, it does everything in memory. It wraps the JavaCompiler in tools.jar
It takes a String, compiles and loads it into the current class loader and returns the Class. It handles nested/inner classes.
http://vanillajava.blogspot.com/2010/11/more-uses-for-dynamic-code-in-java.html
Note: I haven't got this working in OSGi. ;)
