Am I correct in understanding that only the winners of the competition will have to give away all rights to the game to sun?
It would kind of suck to both lose the competition and the game. 
Nobody has to give away all rights to the game. You only have to let Sun uses it for promotional purposes.
Please see: http://www.java-gaming.org/cgi-bin/JGNetForums/YaBB.cgi?board=contest;action=display;num=1080557466
-ChrisM
d’oh!
and
w00t!