Since GWT compiles to java script you don't need jetty if you don't have server-side logic... anyway, in a normal scenario you'll have some server interaction, BUT you're not sticked to jetty; tomcat or other server side technology could be used.
You can deploy the compiled JS to a web server and the server side logic to tomcat, jboss, jetty... even you could interact with php at the server.
Deployment to Google AppEngine is another option, a natural option if you use the eclipse plugin since it's tightly integrated with it.
In eclipse, Jetty is no more than a java process started like any normal java main.
Go to [Run]->[Run Configurations]->[Web Application]->[Your GWT Project] and you'll see a normal java main exec config.
Look at the [Main Class] option -> this is the embeded jetty ..or at
the [VM arguments] for the JVM
The ?gwt.codesvr= param in the URL only instruct the browser plugin to interact with the eclipse plugin embeded jetty in a way that only the modified code is re-compiled to JS and sent to the browser.
If you do not use the ?gwt.codesvr= probabilly you'll have to recompile all the project every time you change a single line of code.
I recommend you to clearly separate the compiled-to-js code and the server side code in different eclipse projects.
I also run the embeded jetty only for the client-side code; the server side code is run in tomcat.
That way I have a clear separation of layers at the time I can debug client-side GWT code and server-side java code.
?gwt.codesvr=parameter. - Hilbrand Bouwkamp