I've been hacking around this issue by using the SunSPOT emulator(runs squawk)...
Basically what I have is a copy of the GRTFramework(
http://code.google.com/p/grtframework/), which wraps around all the WPILib stuff. The change I make is that the copy of the framework I use has been "neutered"...instead of actually calling WPILibJ, I update/read the state of a 'Robot' object that has GPIO and analog and PWM and so on.. its an emulation, but keep in mind that it doesnt simulate the actual hardware(no real sensors). I can simulate inputs but its not exactly pretty.