Hi Emily,
Custom domains should work if you provide a Provider for them. Please
read through the quickstart (
http://code.google.com/p/bitlyj/wiki/
QuickStart) page and note the mention of Providers. Then peek at how
Jmp support was implemented. I haven't used custom domains, but I
think it should be as simple as creating a Provider for that domain.
Let me know if you have any questions.
-chris