Java byte codes can be compiled on the fly to code that rivals C++ in speed using a "just-in-time compiler." Several companies are also working on native-machine-architecture compilers for Java. These will produce executable code that does not require a separate interpreter, and that is indistinguishable in speed from C++.
While you'll never get that last ounce of speed out of a Java program that you might be able to wring from C or Fortran, the results will be suitable for all but the most demanding applications.
It is certainly possible to write large programs in Java. The HotJava browser, the Eclipse integrated development environment, the LimeWire file sharing application, the jEdit text editor, the JBoss application server, the Tomcat servlet container, the Xerces XML parser, the Xalan XSLT processor, and the javac compiler are large programs that are written entirely in Java.