After seeing David Heinemeier Hansson ask the "Groovy on Rails" project not to use that moniker (since it isn't Ruby, it isn't Rails, and it has a completely separate codebase), I figured I'd play it safe and ask him directly whether "JRuby on Rails" would be acceptable. We intend to run Rails unmodified, and we're trying to be as "Ruby" as possible, so it seemed to me that since JRuby on Rails is the same under the covers, the extra "J" wasn't that big a deal. David agreed:

As long as Rails remains virtually unaltered and fully functional, I suppose JRuby on Rails isn't too bad. I'm a tad protective of the term Ruby on Rails, though, and I want to make sure that there's no confusion about what it refers to. But I can't immediately see any confusion points here.

So the JRuby on Rails name should stick, and we have cautious approval from the Rails creator himself to use it. Huzzah!