Class loaders in Java are responsible for loading and providing access to classes. They allow separate class namespaces and delegation between class loaders. Understanding class loaders is tricky due to problems like classes not being found, wrong classes being found, classes being found multiple times, and class loaders leaking memory. Modern frameworks like OSGi implement more sophisticated class loading that isolates dependencies but can also be more restrictive and prone to leaks. Troubleshooting class loading issues requires understanding how different class loading mechanisms work.