In this approach we seperate into two main factions, one working on the JosBox, the other working on JOS.
The JosBox would be virtual hardware on which the VM rests, on top of that is JOS itself. JOS would control the computer's hardware via the JosBox and the Applications could run blissfully unaware of the OS below.
Basically: JosPlatform = JosBox + JOS
This approach would allow us to start development faster sense we would know almost exactly what we have to do.
I would also add that the upper level and lower level should conform to the standard Java API in ALL ways, so that software not designed for JOS, could be run in JOS. This would have to include the JRE/JDK methods of extension, and property managment.