Yesterday Mark Reinhold announced that Oracle will not pursue modularity for JavaSE 8: http://mreinhold.org/blog/late-for-the-train. Following long delays for the Modularity JSR the decision was made not to postpone JavaSE 8 or rush through the JSR but rather postpone the Modularity part of Java 8 and push ahead with the rest of it.
So what does this mean for Modularity in Java? Well, I think its an appropriate decision to not rush things through. As modularity is such a fundamental piece of functionality you don't want to cut corners with the architecture. OSGi has been providing modularity to Java for over 12 years now and there are a lot of lessons to be learnt from it.
Project Jigsaw is a prototype of a modularity system that's part of the Java runtime, but at this stage it's just one approach to this. In Project Penrose work is ongoing around improving the extensibility of Jigsaw so that it can work better with other module systems such as OSGi.
While some work is definitely needed to modularize Java itself, as an application developer you don't need to wait for this. If you need modularity in your applications, then OSGi provides all that you need today and it has been proven for years by many in the field.
It's good that the Modularity JSR will get some proper time now. I hope the process will be democratic and that the result will provide the best technology possible that keeps extensibility in mind.