What would be an ideal environment for Java? What would be the ideal Operating System/Server, Server and Application Server, IDE, and what else does one need to set up a good, sound environment?

By environment,I am assuming that you are talking about development environment. To set up good environment,they are two ways to do it either you spend a lot of money to get the commercial products or spend no/minimum amount of money to get the open source tools.

Operating System -- Linux(free)
Web Server - Apache(free)
App server - Websphere/Weblogic(if u are willing to spend lot of money) or just get Tomcat and Jboss together for free
IDE - Eclipse/NetBeans/jedit(free) or
      intellij(low price)
      WSAD/JBuilder/Jdeveloper(expensive)
Testing - junit(free)

Hope that helps.

Money is not the issue actually.. the issue is just what would be the best environment in terms of security etc..

Would linux be better or unix? what are advantages of using Sun for servers?

If money is not an issue then use Websphere on Red Hat Linux with Apache as Web Server,WSAD as IDE. Sun solaris boxes are rock solid but very expensive. So why would you spent more money on Sun hardware when you get the same/better performance with Linux? Even Sun is going into Linux now :-)

This may be a really dumb question but if since java is platform independent I can develop my applications in Windows NT environment and take them to Linux and use them... so why is it that it is more secure to develop applications in Linux/Unix and Java

Either a win2k advanced server or win xp as an O/s and Eclipse as an IDE.