There's a PDF about it. It appears to be a presentation for JavaOne. It may be locked down at any minute, so the link might not work by the time you read this.
Caroline looks a lot like Amazon EC2, but with some very nice control over VLANs (I suppose they would be Virtual VLANs?), load balancing policies, and DNS... all things that EC2 lacks today. ZFS instead of S3, that will make for a more familiar storage model. No trickery needed to make data persist across restarts.
All in all, it looks very nice.
(Hmmm. On second glance, this presentation is from JavaOne 2007! Not much of a scoop there, Reg.)
Does anyone know what happened to this project?