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If, while working with GWT hosted mode, the browser just hangs while loading the application, check the server logs for the following error:

 [SPAM] EXCEPTION
org.mortbay.jetty.HttpException: null
       at org.mortbay.jetty.HttpParser.parseNext(HttpParser.java:276)
       at org.mortbay.jetty.HttpParser.parseAvailable(HttpParser.java:205)
       at org.mortbay.jetty.HttpConnection.handle(HttpConnection.java:380)
       at org.mortbay.io.nio.SelectChannelEndPoint.run
(SelectChannelEndPoint.java:395)
       at org.mortbay.thread.QueuedThreadPool$PoolThread.run
(QueuedThreadPool.java:488):50250/Test.html

The solution is to rename your ~/.mozilla/eclipse/ directory, then it should work fine.