Using GWT SuperDevMode is the recommended way for development.

For an introduction see:

http://www.gwtproject.org/articles/superdevmode.html
http://www.badlogicgames.com/wordpress/?p=3073

Running:  
- Serve the website
$../gradlew jettyDraftWar

- The codeserver can be executed on another shell
$export _JAVA_OPTIONS="-Xmx1024m"
$../gradlew gwtSuperDev