This is awesome! I am not familiar with how compilers/VMs are generally implemented, but the tracelets and guards idea strikes me as very general - in particular, it looks like this approach could be applied to provide type inference to any dynamically typed language. Has this kind of thing been tried before?

In terms of optimization, is it possible to create tracelets that are not continuous regions in code? Roughly, if you identify two non contiguous tracelets, having the same inputs, and can guarantee the inputs havent changed in between, then you could merge them together. Because bigger tracelets would mean less guards and better performance.