JUnit test for System.out.println()

using ByteArrayOutputStream and System.setXXX is simple:

private final ByteArrayOutputStream outContent = new ByteArrayOutputStream();
private final ByteArrayOutputStream errContent = new ByteArrayOutputStream();
private final PrintStream originalOut = System.out;
private final PrintStream originalErr = System.err;

@Before
public void setUpStreams() {
    System.setOut(new PrintStream(outContent));
    System.setErr(new PrintStream(errContent));
}

@After
public void restoreStreams() {
    System.setOut(originalOut);
    System.setErr(originalErr);
}

sample test cases:

@Test
public void out() {
    System.out.print("hello");
    assertEquals("hello", outContent.toString());
}

@Test
public void err() {
    System.err.print("hello again");
    assertEquals("hello again", errContent.toString());
}

I used this code to test the command line option (asserting that -version outputs the version string, etc etc)

Edit: Prior versions of this answer called System.setOut(null) after the tests; This is the cause of NullPointerExceptions commenters refer to.

I know this is an old thread, but there is a nice library to do this: System Rules
Example from the docs:

public void MyTest {
    @Rule
    public final SystemOutRule systemOutRule = new SystemOutRule().enableLog();

    @Test
    public void overrideProperty() {
        System.out.print("hello world");
        assertEquals("hello world", systemOutRule.getLog());
    }
}

It will also allow you to trap System.exit(-1) and other things that a command line tool would need to be tested for.