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It seems that implementation of isPlugin2() always check for UseNewJavaPlugin under 1.7.0 key in the registry.
Should be looking under 10.0.*
problem: isPlugin2() always return false with JRE 7 or above. it is using JRE version to check for whether plugin is enabled. it will not work starting with JRE 7 because JRE version and deploy (plugin) version is not the same anymore.
fix: use BrowserJavaVersion key instead - this is better since it tells you the current default plugin version that is registered to browser.