That Microsoft isn't going to put a JVM in Windows XP, does not mean that you cannot install the JDK or JRE on Windows XP. So there's no reason to think that Java is going to die. Anyway, nowadays only very few people are writing applets, and Java works mainly on the server (J2EE), which most of the time does not have a Microsoft operating system installed.
Don't go looking for another job, there will be plenty of work in the Java field for the coming years.
regards
Jesper
http://forum.java.sun.com/thread.jsp?forum=32&thread=149700
In that topic in the JRE forum, the following proactive measures have been introduced.
JRE pre-install by OEMs (consider signing it)
http://www.oreilly.com/news/jvm_0701.html
Incremental updates to the JRE (consider voting for it)
http://developer.java.sun.com/developer/bugParade/bugs/4267080.html