There is a JEP156 about making G1 able to unload classes without a full GC, but the dependences section states that it makes sense to wait with [JEP122] until the permanent generation is gone to make JEP156 easier to implement.
So it looks like that this problem may indeed be solved in Java 8, but not just thanks to the meta space, instead because meta space is taken as a pre-requisite to do incremental GC of classes.
That's my understanding.
edit: Over the past few days I've been listening to some of this year's JavaOne sessions and quite luckily I found one just today about PermGen removal that says it all:
- HotSpot currently requires full GC to collect PermGen
- This will still be true even after introduction of Metaspace
- The summary slide at the end seems to confirm that JEP156 is still planned (but she does not talk about it)
- It even answers the bonus question for which I had an answer but no source: Yes, PermGen is in the heap