In cooperative models, once a thread is given control it continues to run until it explicitly yields control or it blocks. In a preemptive model, the virtual machine is allowed to step in and hand control from one thread to another at any time. Both models have their advantages and disadvantages.
Java threads are generally preemptive between priorities. A higher priority thread takes precedence over a lower priority thread. If a higher priority thread goes to sleep or blocks, then a lower priority thread can run (assuming one is available and ready to run). However, as soon as the higher priority thread wakes up or unblocks, it will interrupt the lower priority thread and run until it finishes, blocks again, or is preempted by an even higher priority thread.
The Java Language Specification allows VMs to occasionally run a lower priority thread instead of a runnable higher priority thread, but in practice this is unusual.
However, nothing in the Java Language Specification specifies what is supposed to happen with equal priority threads. On some systems these threads will be time-sliced, and the runtime will allot a certain amount of time to a thread. When that time is up, the runtime preempts the running thread and switches to the next thread with the same priority. On other systems, a running thread will not be preempted in favor of a thread with the same priority. It will continue to run until it blocks, explicitly yields control, or is preempted by a higher priority thread.