The JVM does not run in the browser. Its windows can run physically "in" the browser window, inasmuch as it would appear that the Java app was "in" the browser, but the Java app itself was a "plugin", and was a separate OS process. That's not the right kind of "in".
The JVM has never run in the same process as the browser, to the best of my knowledge, with the exception of the ill-fated "HotJava" browser: http://en.wikipedia.org/wiki/HotJava which ran Java applets "in" the browser by virtue of being written in Java, instead of C++. At the time this was too sluggish for general use, though.
So allow me to repeat myself: We can't run the JVM in the browser right now. The impedance mismatch between the JVM and the C++ world are just too great to have sufficient performance right now. All the current browsers are enormous piles of C++ code. There is no way to "just" integrate a JVM directly into them, and no bridge between the two is going to have enough performance for the demands we're putting on browsers. It doesn't matter how awesome Java may or may not be when the browsers aren't in Java. It's not an option today, short of replicating Sun's feat and rewriting your own browser in Java. But the only thing stopping you from doing that is the sheer size of the task, rather than any technical problem. (But make no mistake, it is an enormous undertaking now to write an engine capable of replacing any of the existing ones for even a single well-chosen use case.)
The JVM has never run in the same process as the browser, to the best of my knowledge, with the exception of the ill-fated "HotJava" browser: http://en.wikipedia.org/wiki/HotJava which ran Java applets "in" the browser by virtue of being written in Java, instead of C++. At the time this was too sluggish for general use, though.
So allow me to repeat myself: We can't run the JVM in the browser right now. The impedance mismatch between the JVM and the C++ world are just too great to have sufficient performance right now. All the current browsers are enormous piles of C++ code. There is no way to "just" integrate a JVM directly into them, and no bridge between the two is going to have enough performance for the demands we're putting on browsers. It doesn't matter how awesome Java may or may not be when the browsers aren't in Java. It's not an option today, short of replicating Sun's feat and rewriting your own browser in Java. But the only thing stopping you from doing that is the sheer size of the task, rather than any technical problem. (But make no mistake, it is an enormous undertaking now to write an engine capable of replacing any of the existing ones for even a single well-chosen use case.)