Is derby meant to be an alternative on the scale of MySQL? or will it be aimed at giving HSQL users an alternative?
Derby's roots in Cloudscape focused on the embedded database market - typically some form of database that could be distributed with an application rather than as a standalone RDBMS. This is kind of like HSQLDB but in comparison Derby has many more capabilities (e.g. multi-user isolation, reliably durable data, distributed transactions, ...) A lot of organizations have used MySQL in similar circumstances and Derby may well provide an alternative there.
Another area is that of a simple but reliable data store for a web application, perhaps in conjunction with a Java server such as Apache Tomcat or Apache Geronimo; there have been a lot of installations of HSQLDB and MySQL in those environments and if that is your situation Derby may again be a good alternative.
Derby is also aimed at the mobile arena - for example, Dan's work on JSR169 support.
On the other hand, I wouldn't recommend it for a 10TB datamart - well not yet anyway :-)
In the end, it really depends on what you want to use it for.
-- Jeremy
