Ok I let it install MS Java and restarted the machine. Ran the MSJVM Remove tool from Microsoft and rebooted. Now Sun Java Applet no longer works in IE/Maxthon/Avant. I guess the MSJVM Removal tool disabled Java support completely. This has happened to me before but I wasn't sure at which point it started happening.
Installed MSJVM build 2710. It asked me to reboot but I didn't reboot. Loaded IE and tested Java availabilty from http://java.com/en/download/help/testvm.xml and now it says Congratulations you have latest Sun Java version 1.5.0_01 installed. Something is dodgy with the MSJVM Removal tool.
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