Platform: Windows (winNT/win98)
Build: JRE1.3.1-rc1-b21

Steps to reproduce:

1) Install JRE 1.3
2) Install JRE 1.3.1-rc1-b21
(At this point, you should have both versions of JRE 1.3 and JRE 1.3.1 installed on your system as: drive:\Program Files\JavaSoft\JRE\1.3
                   drive:\Program Files\JavaSoft\JRE\1.3.1 )
And you can run successfuly any demo applets at:
  http://sqesvr.eng.sun.com/deployment1/ws/doc/proc/JPI_bat.html

3) Remove JRE 1.3 from (Start/Settings/Control Panel/Add-Remove Program)
This will leave only JRE 1.3.1 on your system (The Control Panel should indicate so)

4) Try to run any demo applets mentioned in step 2 above by using NS4.7 or IE5.
This time the browser can not find the plugin and ask user to download plugin.

Since JRE1.3.1 is still on the system, the applet should have been loaded without asking users to download the plugin.

It seems that multiple JRE's versions supported since JDK1.3.1-rc1-b21. It should allow users to remove the old version of JRE after they install the new one without encountering any afterward problem.