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"I develop java apps on my PC before I upload it to our app server, and a 1.7Ghz P4 with 512MB is twice as fast at executing the sql queries and serving the page."
One of the flaws I noticed about many PC Java developers is that they think trivial benchmarks tell them everything they need to know about a platform. "Oooh, this system is slower at X, so let's trash it entirely and go to this other system which is cheaper up front and is on the cover of JavaPro!" It pretty much burns them, because they don't know all the variables, but they never realize it until they are laid off (this takes years, because their managers are often from the same breeding pool and it takes a few years to run a company into the ground).
Sun still manages to break records on a number of application benchmarks, even with measly systems like your UltraSPARC IIIi one. There's more to life than just an SQL query. What are the bottlenecks in your system? Have you done profiling? What about under load? What happens when you throw tens of thousands of queries against it? Does your PC look as good, then, with its IDE disks and crappy OS?