It just selects the “Server Hotspot VM”. See documentation (Solaris/Linux) for java.
According to Wikipedia:
Sun’s JRE features 2 virtual machines,
one called Client and the other
Server. The Client version is tuned
for quick loading. It makes use of
interpretation, compiling only
often-run methods. The Server version
loads more slowly, putting more effort
into producing highly optimized JIT
compilations, that yield higher
performance.
See: http://en.wikipedia.org/wiki/HotSpot