From the annals of the JUG leaders' mailing list:

JDJ has just posted an interview discussing the details of a money grant that Sun is giving for developers to work on open source projects.
The idea is that developers can submit ideas, and the best ideas will receive a money grant to be implemented. Developers can submit ideas in teams or individually. The prizes are very good, and may interest developers in your area.

    http://jdj.sys-con.com/read/503097.htm

For Java developers, there is much more then the NetBeans contest that is referred to in the above interview. Java developers can work on projects related to NetBeans, Glassfish and OpenJDK:

    - NetBeans Projects
        prizes up to US$ 21,000
        http://www.netbeans.org/grant

    - Glassfish Projects
        prizes up to US$ 20,000
        http://wiki.glassfish.java.net/Wiki.jsp?page=GapTop
    
    - OpenJDK Projects
        prizes from US$ 25,000 to US$ 175,000!
        http://openjdk.java.net/challenge

There are also special grants given for other communities (OpenSolaris, OpenSPARC and OpenOffice):

    http://www.sun.com/software/opensource/awards/index.jsp