Here's an older forum post about writing Processing sketches in Eclipse.

Upshot:

Create a new Java project.
Add PROCESSING/lib/core.jar to the build path of the project.
Create a new class that subclasses PApplet.
Run as Java Applet. You'll have to set width,height of applet separately in the run configuration.
For testing of new libraries, just add the library project to the build configuration.
Since you're not running the preprocessor now, the code needs to be "real" java. Some trickiness:
- "color" is not a valid type. "color()" is still a valid method call though. Replace color as a type decl with a simple int. For Example: color x = color(123,002,203); becomes int x = color(123,002,203);
- More info: http://processing.org/discourse/yabb/YaBB.cgi?board=Integrate;action=display;num=1106256315;start=48

ProcessingInEclipse