One benefit of "real Java" embedded systems is that they accept standard Java class files. Any Java development toolset which includes a Java compiler from the last two years or so should work OK. All the Java IDEs are based on the underlying Java tools licensed from Sun, and all will generate compatible Java class files. They must do this in order to legally call themselves "Java". Any vendor who is using a customized subset which does not accept standard class files is not "real Java" and cannot legally claim to be Java. It's somewhat like money - it's either real or counterfeit and there is no gray area in between. There are many "clean room" Java clones which do not use code licensed from Sun but which do work with standard class files -- for example the GNU classpath at the Free Software Foundation http://www.gnu.org/directory/GNUClasspath.html.

In any case you will need a set of Java tools normally grouped together into a "JDK" or Java Development Kit. These include the java compiler (javac), the java JVM to execute java programs (java), the Java document tool (javadoc), the Java archive tool (jar), and so forth.

You can use your favorite IDE such as JBuilder (my first Java IDE, and still one of my favorites), JEdit (my favorite until Eclipse came along in late 2002), RealJ, and there are many others. Or just use the command line tools. Or write batch or script files to help automate your builds. Or use any ext editor, command line Java tools, and Ant to help automate your builds. More on all those options later.

The main benefit of Eclipse (or another good IDE) is the saving of time. You could frame a wood house using a framing hammer and nails exclusively or you can make judicious use of a power nail gun. A good carpenter knows when to do things by hand and when to use power tools. A good programmer also knows when to develop by hand and when to use power tools.

Eclipse is a free, open source tool which you are free to use personally or commercially. So is JEdit. JBuilder and other commercial IDEs are not free for commercial use and must be purchased. Check the license agreement of the tools you plan to use and be sure you are in compliance with the terms of use.