JRun CFusion server won't start after updating JVM

I had the same issue as you. I had initially installed the new JVM to {cfusion}/runtime/jre after just renaming the old version's folder jre-old. After several re-installations and using different versions I still couldn't get it to work. Once I installed it to C:\j2sdk1.4.2_12 then changing my jvm.config to point to the new location, the server started just fine.

What errors appear in the runtime/coldfusion-out.log, server.log or cfserver.log? That should point you in the right direction. If you are on windows your runtime/bin/jvm.config should probably be pointing to JAVA_HOME as c:/j2sdk1.4.2_11/jre. Does it? The forward slashes are required for java or you can use double back slashes as:
c:\\j2sdk1.4.2_11\\jre.

If this does not get you going start by moving back to the original internal JRE:
c:/cfusionmx7/runtime/jre. Make a backup of you jvm.config outside the CF directory structure. Then if you break something during an update you can just copy a running copy back in. Generally, the jvm.config.bak in runtime/bin has the same problems as your jvm.config - so an outside backup is better.