I think (?) a single sequence diagram is typically associated with a single Use Case, or a single Collaboration, etc.



So I think you could only really do a sequence diagram for a whole project/java application, if the whole project only participates in a single Use Case, basically.



Also I've never heard of auto-generating (or reverse engineering) sequence diagrams from source code; I've only heard of auto-generating static class diagrams from source code.



I had a training class once, on Rational XDE, and we asked the instructor all about stuff like this, because our boss initially thought that we could auto-generate all sorts of neat diagrams from our source code..... he was really disappointed in the end, that all we could auto-generate was simple class diagrams, each from one single package at a time.