I've developed a StopWatch which will just display the continuous time counter on the window when you run. I've just created one button "Start" and it will turn into "Stop" when we hit. This is very limited, if you want you can extend this to implement pause / reset and next lap etc.
import java.awt.*;
import javax.swing.*;
import java.awt.event.*;
import java.text.DecimalFormat;
import java.text.NumberFormat;

/**
 * StopWatch
 * @author Santhosh Reddy Mandadi
 * @since 08-Jun-2009
 * @version 1.0
 */
public class StopWatch extends JFrame implements ActionListener,Runnable
{
 JLabel disp;
 JButton btn;
 boolean stop=false;
 int i,j,k,l;
 public StopWatch()
 {
  disp=new JLabel();
  btn=new JButton("Start");
  disp.setFont(new Font("Helvetica",Font.PLAIN,20));
  disp.setBackground(Color.cyan);
  disp.setForeground(Color.red);
  Container c=getContentPane();
  c.setLayout(new FlowLayout());
  c.add(disp); c.add(btn);
  btn.addActionListener(this);
 }
 public void run()
 {
  for(i=0;;i++)
  {
   for(j=0;j< 60;j++)
   {
    for(k=0;k< 60;k++)
    {
     for(l=0;l< 100;l++)
     {
      if(stop)
      {
       break;
      }
      NumberFormat nf = new DecimalFormat("00");
      disp.setText(nf.format(i)+":"+nf.format(j)+":"+nf.format(k)+":"+nf.format(l));
      try{
       Thread.sleep(10);
      }catch(Exception e){}
     }
    }
   }
  }
 }
 public void actionPerformed(ActionEvent ae)
 {
  Thread t=new Thread(this);
  if(ae.getActionCommand().equals("Start"))
  {
   t.start();
   btn.setText("Stop");
  }
  else
  {
   stop=true;
  }
 }
 public static void main(String[] args) 
 {
  StopWatch s=new StopWatch();
  s.setSize(500,100);
  s.setVisible(true);
  s.setTitle("StopWatch");
  s.setDefaultCloseOperation(EXIT_ON_CLOSE);
 }
}

Here the screenshot of the program output.