With the release of OS X 10.7 Lion, Apple has made an effort to streamline the OS to the prevalent technologies used in OS X and on the Mac platform in general. Apple is pushing developers to use 64-bit code instead of 32-bit code even for applications that do not need it, use native Intel code instead of maintaining PowerPC code and optimizing its performance under Rosetta (which is now missing from the OS), and implement Objective-C Coco APIs instead of Java and alternatives. Nevertheless, many programs (including popular tools like Adobe CS4 and earlier) still require alternative runtimes like Java, and even though Apple has left Java out of the OS by default, you can still get it for the OS if you need it.
Apple has announced it will not be maintaining an in-house version of Java, but for now Apple has made available Java 1.6.0_26 (the same version that is available for Snow Leopard) for people to install in OS X 10.7 Lion if needed. The update is available for download from the Java for OS X Lion Web site.
In addition to being available as a standalone installer, the OS should present the option to install Java if you run any program that requires Java to be present. As with Rosetta in Snow Leopard, if you run such a program the OS will trigger Software Update to download and install the required Java runtime, and will ask you if you would like to do this.
The future of Java on OS X is unclear, but for now it appears when Apple drops development of Java that Oracle will assume the reins and maintain future releases of the runtime for OS X, should demand for it by Mac users continue.