If you are curious enough about programming languages then you probably have heard about Scala - the 'statically typed' functional and object oriented language. Scala is the new sun rising to balance 'the burn factor' between functional and object oriented schools of thoughts.
Unlike what this paper suggests[pdf], The reason why I think Scala exists is because functional v/s object oriented groups are moving in opposite directions, which is not only inefficient but they can't leverage achievements of one another. If you read about functional v/s object oriented programming comparison, every argument boils down to productivity, tooling and maintainability of code. While functional languages (Lisp, Haskell, Python etc.) offer excellent productivity compared to OO languages (Java, C++ etc.), Object oriented languages offer excellent tooling and are relatively maintainable. The reason why I think OO languages have been so popular is due to its easier to understand concept which is easy to map in real life, so for most people who have never took computer science course OO is still easier to grasp compared to Functional programming methods like list comprehension, closures or the higher order functions which are rooted from the formal systems of mathematics.
Scala tries to satisfy both of the groups by providing grammar and a type system which seamlessly integrates with mainstream platforms (Java, .NET) and offers powerful functional abstractions only available in dynamic languages. What this means is, Java developers can write their code in same fashion they write in Java using existing libraries and frameworks but with an added advantage of functional programming techniques wherever they feel it might be productive. Functional programming language enthusiast get access to rich class libraries and powerful tooling (eventually).
If you take a look at the Scala language grammar[pdf] you will notice that what you can create with Scala is limited by your creativity. Based on what I have learned so far, I find Scala much more refreshing than Java, Scala feels a lot more like a programming language of the 21st century! Scala compiler itself is pluggable so you can do heck of a stuff you can only dream with javac, ecj. What is missing is tooling, the existing tooling is scrap but that will improve hopefully with an active community.
Bill Venners of Artima has presented Scala wonderfully, take a look at the presentation[requires flash] on 'The feel of Scala'.