You know you have the Sun JVM installed correctly, there are no traces of the Microsoft JVM, the plugin exists, but you can't see it in either Firefox or IE?
I had this problem for some time, and have finally found the cause - I have a custom transform for deploying Java, which turned off automatic updates, set the default JVM, etc, and also accepted the EULA. As of about 1.5.0 Update 6, setting EULA to 0 means that the JVM looks for EULA.DLL, doesn't find it, and silently dies.
Don't set the EULA property to 0 anymore. Ignore it.
You also used to be able to turn off the Automatic Updates in the properties table, but you can't any more. You have to edit the MSI to run a registry script as the last action, and even then there are reports that Java will create the links on first-run. I don't want my workstations getting a pop-up message saying Java will update when I carefully select the version to deploy, thanks Sun!