So, after some discussion on the #jruby IRC channel, the core team has decided to go with a 5+ strategy on trunk. The reasons for this is that almost everyone who commented on the issues advised us to move on, and the features of 5 is quite compelling.Part of the reason was the ability to use new language features to implement the JRuby runtime. Java 5 Annotations, for instance, are now used to provide metadata for method bindings. Another area was the ability to use the Concurrency libs included in Java 5. JRuby 1.0 ships with a backport of these libs, but they don't come with all the performance improvements the bundled equivalents on Java 5 provide.
Users limited to Java 1.4 are supported, as the JRuby team will build a version treated with Retroweaver, which takes Java 5 code and exports classes compatible with a Java 1.4 VM. Another similar tool is Retrotranslator. These tools go quite far in Java 5 support. Both even allow features such as Annotations to work on Java 1.4.