Although I don't see Java on the client being any different than it used to be; maybe a little better, but not compared to alternatives (or maybe I just haven't payed much attention to Java client technology). But in any case, Java on the server is alive and well, doing better than ever. I think the arrival of lightweight alternatives to EJB's is making Java development a lot smoother than it has been.

Take a look at tools like Spring and Hibernate, for example. J2EE is no longer as cumbersome as it used to be. These new developments make Java equally useful as many of the alternatives, if not more useful for many types of server-side software. Web services is also helping making Java a very viable option on the server side, since you remain flexible in your choices for what software interoperates with your web services.