I've heard that Jetty is better than Tomcat (and is supposed to get rolled into JBoss, I believe). As for other free servlet engines, I'm not aware of any (that are good enough to mention, at least). As for commercial servlet engines, then there's Orion (not expensive, but not dirt cheap) or Caucho's Resin (very fast, and I believe it only costs about $500, though I'm sure you could get a discount if you bought enough licenses).
The latest version of Tomcat (the 4.x version) is fairly stable and full-featured (for servlet engines). I would use it in a production environment that was expecting more than a hundred or so concurrent users, though (that, of course, could mean potentially thousands of possible users, which is different).
As for JSP's....depending upon the team you have, struts, cocoon, velocity, etc. may work. Do your homework, but don't make the decision based only on the technology, as you've got a team that has particular strengths/weaknesses. Also, different types of sites will work better with different technologies.
Dan