This problem has been reported in the java.net plugin's forum:
http://forums.java.net/jive/thread.jspa?threadID=44150&tstart=0

To reproduce the problem:
- install JRE 6u10 - the next-generation Java Plug-in is the default
- open the Internet Explorer's Internet Options "Advanced" panel
- uncheck the following checkbox
        Use JRE 1.6.0_10 for <applet> (requires restart)
- run an applet with an <object> tag, such as
      http://java.sun.com/products/plugin/1.5.0/demos/plugin/applets/ArcTest/example1.html

The applet won't load.
However, the above steps works with the classic Java Plug-in.