Also been looking very closely at JamVM. The Dalvik VM was effectively forked from JamVM, which would lead me to think that the speed will be similar (and therefore "acceptable"). In particular something that really impressed me about JamVM (well, Dalvik) is that it is a 100% complete, compliant J2SE VM, with synchronisation, references, accurate GC, native threading, and even the full Java serialization protocol working. I've been compiling resource on my desktop and the resulting binary files work perfectly in Dalvik!
One issue with JamVM might be though, that last time I heard, iOS will not allow normal applications to write to code memory (a la JIT compilation). This would force JamVM to run in purely interpreted mode, which is about 2-5x slower most of the time, and unfortunately that's back in the realms of "not very useful". Except maybe for turnbased stuff, so an eye might still be kept askance upon it.
A LWJGL binding to iOS would be sweet in any case.