We recently ran a test with a user who was complaining of the same thing. We discovered that if the server is run in debug mode, and you're merely changing java files (and not changing the 'structure' of the class, just the content of the methods), hot-code replace actually *does* work.
If you need to change jsp's or html files, however, it does not, and a repackaging is required. For now.
Yes, JSP's, and everything... I feel like a third of my development time is spent on packaging and deploying...
Thanks for your response.