The graphics api I have decided to use is Slick2D, it's a simple set of tools wrapped around the lwjgl OpenGL binding for Java.
It has a few things that are nice to have and will save me a lot of work. There's some simple menu stuff. A way to create multiple scenes, so I can split my game up in sections, like actual game, inventory, menu and so on.
There is an active community around Slick at the time I am writing this, but you should check out before you start using it.
I am not sure what the performance is, but since it's based on open gl, it can't be that bad. I will post some screen shots and information when I get it working.
You can read more about it here http://slick.cokeandcode.com/