ArgoUML is a Java based open source UML tool. The new project which was started for the 2006 Google Summer of Code, called ArgoEclipse. The aim is to bring the ArgoUML into Eclipse with synchronized source code and UML diagrams.
They already have a version that runs in Eclipse 3.2 (check the screenshot). It is very early code and has a lot of integration missing. But it looks promising. This should become a good free alternative to the commercial ones like EclipseUML.
FYI for your readers, if you already utilize MyEclipse, ArgoUML is integrated, debugged, and has functionality added. While not open source, MyEclipse is "almost free" at $30/year for 1500 features on top of Eclipse.