Gents as i described above, the problem arises after the quick tutorial is run, and specifically somehow with the choosing of message display option, which somehow resets plugins permissions, and not only Java but download managers, flash and so on.
More tests:
If you do as suggested and run JV as admin, you will get one prompt and no further, however go into settings and change the messaging option, click test , close JV run IE and you get the endless protected mode prompts.
This issue is NOT there in JV 2008 or any version prior i used to date.