Can hibernate annotation replace xdoclet now? Is the xdoclet enough tool to support now? for example create sql script?

Yes - Xdoclet and Annotations both don't are not 100% coverage of HBM but the large majority of both is covered. The choise is yours. Personnally, go with Annotations if JDK5 is not an issue.

Yes i am using jdk1.5. I just afraid that the whole project will be affected in the future. Is it in the future the hibernate annotation will fully replace the hbm?

annotations will (and is very close) to support all the hbm.xml functionallity; except some parts that you will probably still need to use hbm.xml for...but since they can both be mixed its no problem.

so in short annotations and hbm.xml is here to stay.