I had success compiling a small-scale mixed Scala and Java project. scalac takes both .java and .scala sources without much fuss, in my experience. I think this is an area that's improved a lot since the author wrote about it.
I worked part-time at an ATDC company while I was in school at Tech. It was a scrappy startup with a lot of smart people. Overall, it was a very positive experience.
I've done a lot of webapp development in both Java and Rails. I would agree that the iteration cycle is shorter in Rails, but it's not as bad as your description makes it sound. If you have to redeploy a jar file as part of your development process, then that's a problem with your process, not your language.
When I do Java webapp development in Eclipse, it compiles and hot-swaps my code in the background without requiring any restart or redeployments. Works pretty well.
I do have to restart occasionally because the hot-swapping has limitations, so that does slow things down a bit, but when you consider the time saved by having good compiler integration, then I don't think there's a big difference in productivity.
...not that there's anything wrong with that. I love the conciseness of Scala compared to Java and, even if it's not as elegant as a pure functional language, it seems like a great language for Getting Things Done.
I've been hacking in Java, Ruby, and Haskell for some time and when I started learning Scala, I quickly came to the conclusion that it was much more like Ruby than it is like Haskell.
One solution could be to compare the downloaded file with an expected hash. That'd at least give you the opportunity to audit the code once. Something like...