Glassfish is an Open Source project driven by Sun to build an EE 5.0 Application Server. The java.sun.com site has an overview of the project and where to go for further information.
This project is a big deal since this is the first time that Sun has driven a project like this to provide their first implementation of a new spec for a Java EE Application Server, other than providing reference implementations which are not considered production ready.
In addition to open sourcing the development, Sun have donated Sun Java System Application Server Platform Edition 9, as the starting point for the development, so the project already had a solid start from a known platform. In addition to this, Oracle have donated the source for Toplink, their ORM solution (previously from WebGain).
I expect this project is in response to the phenomenal success that JBoss have had with their open source App Server, and the fact that for the past few years they are always the first to have an implementation of a new spec out there and ready to go, way ahead of the commercial vendors.