Woah, I'm surprised no one mentioned "Why not just use Flash, as most people are basically guaranteed to have it already?" Well, to answer the un-asked question, Flash is locked down quite a bit more (by default) than Java, which may get in the way of some of the features of the suggested project.
For instance, Flash is only able to download files or establish connections with the domain name where the Flash app itself originated. What if the Lemmings multiplay server is different from the web server where the game applet is stored? In Java, that's not an issue.
Additionally, Flash is much slower due to interprated ActionScript.
In response to concerns about legal action: The play testing mode, as described, is a tool to assist in the creation of levels. Sony's attourneys would not be able to prosecute such a feature, as it is not copying or in some other way attempting to pass off as any of Sony's intellectual properties. People would be able to use the play testing mode to, say, play the game online for free, but of course such actions will not be condoned by the author or the community... Right guys!?
I do have to say though, given how much the forums had gone dark in the past, I'm rather skittish about the idea of storing levels on a server online. I guess it could be okay if they're always automatically sync'ed and backed up with copies on your local computer. Of course, the next worry is the spectable of not being able to edit your levels anymore because the server went dark (whether temporarily or permanently), although again, this can be mitigated if the Java editor can be released in a standalone form to be run as a Java standalone application rather than only over the browser.
In either situation, user data should be stored on a trustworthy server. I would not consider this forum system's server to fall under that category. Even if something were to happen, any smart server engineer would have backup systems in place, so even a direct ballistic attack to the server facility itself would not be enough to cause a loss of data.
But please, I beg you, wrap up your current work on the C-based Lemmings 2 Editor first! I trust that you've put enough efforts into that, you would at least bother to wrap it up to shape first before you start your next project.
"Hey, I'm almost done. Let's scrub it and start something else!" Nah. (-: At this point, I have no idea if I'll even delve into Java Lemmings in the first place, so the release of my project in its current form was never out of the question.
I'd be particularly worried if a project like this received any kind of outside attention. If I remember correctly, that's what led to the demise of DHTML Lemmings. Lemmix and the other fan projects have not had any kind of attention, so I wouldn't be surprised if the copyright owners don't even know about them.
DHTML Lemmings was brought down for fear of legal action; no legal action was actually taken. It's an extremely common scare tactic to try to get someone else to stop doing something you don't necessarily want them to do: threaten to sue. The case that would have been brought against DHTML Lemmings claimed that the project used code from the original Lemmings release. Since it did not, and could easily be shown that it did not, the defendant would have won the case. I'd have been surprised if any legal action were taken even if the project stayed online.
The internet has been a thorn in the side of copyright suits ever since people started using it, because of the way copyright is defined. In the United States, at least, an infringing article must match two criteria: 1) It must be either a direct copy or a look-alike of a copyrighted work and 2) it must be intended for use in sale or trade. DHTML Lemmings falls into the first category, but not the second, which means (again, according to US law) that it does not constitute an infringement of copyright.
The primary motivator behind legal action is almost universally money. Whoever threatened to sue over DHTML Lemmings didn't want people playing the product without paying for it. I doubt DHTML Lemmings constituted a copyright infringement even in the Netherlands, where the suit would have taken place, but an invalid argument from the angry attourneys was only prepared to scare the author into retracting his work, and things happened just the way they wanted.