For those in camp B: it's another journal service, using a modified version of the LJ code. It's being run by some former LJ staff, plus a bunch of volunteers. They've made a number of improvements to the LJ code e.g. splitting "friend" into "subscribing" (people you read) and "trusted access" (people who can read locked posts). There are also tools to enable an easy migration from LJ to DW - you can import all of your journal entries and comments from LJ, and they have good OpenID integration, so LJ users can easily comment on DW posts (and vice-versa, I believe).
They also intend to stay free of advertising, and to grow slowly and steadily - they've done the sums so that they'll cover the first year's costs from an initial sale of permanent "seed" accounts, and thereafter use income from paid accounts to keep running and growing.
Now, I'm not planning to move over to DW completely, but I will get an account there sooner or later (sooner if I get an invite code, later via paid account if not), and probably cross-post to both places. I don't intend to completely move off LJ, though - I have a permanent account here, and I have lots of photos in the LJ ScrapBook service, which I don't think DW can handle just yet.
On the other hand, I think LJ has some problems that hopefully DW can avoid. Every now and then, I look at the "latest posts" page (note: very likely NSFW) - it used to be possible to see interesting things there, maybe pick up on current events. Now, it's 80-90% spam and porn and porn spam and worse (e.g. links to attack sites), and I don't think LJ has the mechanisms to deal with it all.
PS: On the off-chance that someone from DW reads this, does DW have a similar latest posts page ? I tried the analogous URL but that's not it ...