I have had the same issue. I was running Vista Ultimate (x86), Java Update 11 when I installed JVPT 2009.
I ran registry cleaner on lowest (default) setting, and FIXED ALL. There seemed to be a lot of errors (500 or so), considering JVPT 2008 was 'clean' given the 'same' settings, but the listed errors 'seemed' to make sense.
After that I got the Protected Mode prompts for all IE7 plug-ins (Java, Adobe etc etc). I was also unable to successfully use the 'Test your installation of Java' webpage or to update to update12 via the Java control panel (said there were no updates available).
I manually updated Java to Update 12, and opening up IE, I received the Protected mode prompt once more. Since then, all seems to be working OK. I can now use the 'test the Installation of Java' webpage successfully again.
Definitely something strange happening.