In the old java plugin, switch between sun jvm and msvm can be done by using either java control panel or IE tools/advanced options.
If the new plugin is the default java plugin, from IE tools/advancedoptins menu, deselecte Sun's vm and select msvm. MSVM is not enabled, applet tag is still directed to Sun's jvm.
Turn off the new plugin (turn on the old plugin) first. Then switch the MSVM.
The issue exists when turning off Sun Java from IE Advanced options. There is no issue when using Java Control Panel to reg/unreg plugin for IE.
The check box in IE advanced options is not equivalent to the check box in Java control panel "Default java For browsers". The IE checkbox only modifies the "UseJava2IExplorer" registry key value, while the JCP check box does more to clean Applet clsid TreatAs value and to set MSVM back if exists.
In old pluign, unchecking the "Java Sun" checkbox in IE will stop using Sun Java and load MSVM to run <applet> tag. This is done in npjpi.dll to check the "UseJava2IExplorer" registry key before load Sun JVM. In new plugin, jp2iexp.dll does no such check.
It would desiable to bring the IE checkbox to the same level as the JCP checkbox. One solution is to use SSV module in IE to check the "UseJava2IExplorer" key and call Reg/UnregJava2IExplorer in regutils.dll.