Is .NET/Mono or Java the better choice for cross-platform development?
Well....Java is actually more portable. Mono isn't implemented everywhere, and it lags behind the Microsoft implementation significantly. The Java SDK seems to stay in better sync across platforms (and it works on more platforms).
I'd also say Java has more tool availability across all those platforms, although there are plenty of tools available for .NET on Windows platforms.
Update for 2014
I still hold this opinion in 2014. However, I'll qualify this by saying I'm just now starting to pay some attention to Mono after a long while of not really caring, so there may be improvements in the Mono runtime (or ecosystem) that I haven't been made aware of. AFAIK, there is still no support for WPF, WCF, WF, of WIF. Mono can run on iOS, but to my knowledge, the Java runtime still runs on far more platforms than Mono. Also, Mono is starting to see some much improved tooling (Xamarin), and Microsoft seems to have a much more cross-platform kind of attitude and willingness to work with partners to make them complimentary, rather than competitive (for example, Mono will be a pretty important part of the upcoming OWIN/Helios ASP.NET landscape). I suspect that in the coming years the differences in portability will lessen rapidly, especially after .NET being open-sourced.
Update for 2018
My view on this is starting to go the other way. I think .NET, broadly, particularly with .NET Core, has started to achieve "portability parity" with Java. There are efforts underway to bring WPF to .NET Core for some platforms, and .NET Core itself runs on a great many platforms now. Mono (owned by Xamarin, which is now owned by Microsoft) is a more mature and polished product than ever, and writing applications that work on multiple platforms is no longer the domain of deep gnosis of .NET hackery, but is a relatively straightforward endeavor. There are, of course, libraries and services and applications that are Windows-only or can only target specific platforms - but the same can be said of Java (broadly).
If I were in the OP's shoes at this point, I can think of no reason inherent in the languages or tech stacks themselves that would prevent me from choosing .NET for any application going forward from this point.
Mono does a better job at targeting the platforms I want to support. Other than that, it is all subjective.
I share C# code across the following platforms: - iOS (iPhone/iPad) - Android - The Web (HTML5) - Mac (OS X) - Linux - Windows
I could share it even more places: - Windows Phone 7 - Wii - XBox - PS3 - etc.
The biggie is iOS since MonoTouch works fantastically. I do not know of any good way to target iOS with Java. You cannot target Windows Phone 7 with Java, so I would say that the days of Java being better for mobile are behind us.
The biggest factor for me though is personal productivity (and happiness). C# as a language is years ahead of Java IMHO and the .NET framework is a joy to use. Most of what is being added in Java 7 and Java 8 has been in C# for years. JVM languages like Scala and Clojure (both available on the CLR) are pretty nice though.
I see Mono as a platform in it's own right (a great one) and treat .NET as the Microsoft implementation of Mono on Windows. This means that I develop and test on Mono first. This works wonderfully.
If both Java and .NET (Mono let's say) were Open Source projects without any corporate backing, I would choose Mono over Java every time. I believe it is just a better platform.
Both .NET/Mono and the JVM are great choices, although I would personally use some other language than Java on the JVM.
My take on some of the other comments:
Issue: Performance.
**Answer: Both the JVM and the CLR perform better than detractors say they do. I would say that the JVM performs better. Mono is generally slower than .NET (though not always).
I personally would take ASP.NET MVC over J2EE any day both as a developer and an end-user. Support for Google Native Client is pretty cool too. Also, I know that poor GUI performance for desktop Java apps is supposed to be a thing of the past but I keep finding slow ones. Then again, I could say the same for WPF. GTK# is plenty fast though so there is no reason they have to be slow.
Issue: Java has a larger ecosystem of libraries available.
Answer: Probably true, but it is a non-issue in practice.
Practically every Java library (including the JDK) runs just dandy on .NET/Mono thanks to IKVM.NET. This piece of technology is a true marvel. The integration is amazing; you can use a Java library just like it was native. I have only had to use Java libraries in one .NET app though. The .NET/Mono ecosystem generally offers more than I need.
Issue: Java has better (broader) tools support
Answer: Not on Windows. Otherwise I agree. MonoDevelop is nice though.
I want to give a shout-out to MonoDevelop; it is a jewel. MonoDevelop integrates most of the tools I want use including code completion (intellisense), Git/Subversion integration, support for unit tests, SQL integration, debugging, easy refactoring, and assembly browsing with on-the-fly decompilation. It is wonderful to use the same environment for everything from server-side web to mobile apps.
Issue: Compatibility across platforms.
Answer: Mono is a single code-base across all platforms, including Windows.
Develop for Mono first and deploy to .NET on Windows if you like. If you compare .NET from MS to Java though then Java has the edge in terms of consistency across platforms. See next answer...
Issue: Mono lags .NET.
Answer: No it does not. IMHO, this is an often stated but incorrect statement.
The Mono distribution from Xamarin ships with C#, VB.NET, F#, IronPython, IronRuby, and I think maybe Boo out of the box. The Mono C# compiler is completely up to date with MS. The Mono VB.NET compiler does lag the MS version. The other compilers are the same on both platforms (as are other .NET languages like Nemerle, Boo, and Phalanger (PHP) ).
Mono ships with a lot of the actual Microsoft written code including the Dynamic Language Runtime (DLR), Managed Extensibility Framework (MEF), F#, and ASP.NET MVC. Because Razor is not Open Source, Mono currently ships with MVC2 but MVC3 works on Mono just fine.
The core Mono platform has kept pace with .NET or many years and the compatibility is impressive. You can use the full C# 4.0 language and even some C# 5.0 features today. In fact, Mono often leads .NET in many ways.
Mono implements parts of the CLR spec that even Microsoft does not support (like 64 bit arrays). One of the most exciting new pieces of technology in the .NET world is Rosylyn. Mono has offered the C# compiler as a service for many years. Some of what Rosylyn offers is available via NRefractory as well. An example of were Mono is still ahead would be the SIMD instructions to accelerate gaming performance.
Microsoft does offer a number of products on top of .NET that are not available in Mono which is were the misconception about Mono lagging comes from. Windows Presentation Foundation (WPF), Entity Framework (EF), WCF (Windows Communication Foundation) are examples of products which do not work, or are poorly supported, on Mono. The obvious solution is to use cross-platform alternatives like GTK#, NHibernate, and ServiceStack instead.
Issue: Microsoft is evil.
Answer: True. So what.
Many people offer the following reasons to avoid using Mono:
1) You should not use Mono because Microsoft tech should be avoided
2) Mono sucks because it does not let you use every technology that Microsoft offers
To me, it is clear that these statements are incompatible. I reject the first statement but will skip that argument here. The second statement is true of all .NET alternatives.
The JVM is a great platform and the explosion of JVM languages is awesome. Use what makes you happy. For now, that is often .NET/Mono for me.