The proposal for JSR 308, “Annotations on Java Types” , is available now. I’ve read it diagonally once, and it looks pretty nice. They’re finally adding class and runtime retention for local variables, something my LAPT-javac  already did in October 2006. xajavac also incorporates my own non-standard representation for local variable annotations. Now that a standard representation is emerging, I’ll either have to change my implementation to make it adhere to the JSR 308 proposal, or I’ll have to drop it. That’s not a surprise, though; when I wrote LAPT-javac, I fully expected that it would become obsolete soon.
Subtyping for annotations  is also mentioned, but to my delight only under “Out-of-scope issues”, a.k.a. suggestions. So at least in the near future, xajavac seems to be the only project to incorporate annotations with subtyping into Java.