Weird, if you didn't delete the other installation of mIRC, can you try to replace your on text event with:
Code:
on *:TEXT:*:#:{
  IF ($len($1-) > 10) { 
    !msg $chan testing
  }
}
Where the ! in front forces mIRC to call the built-in /msg command. If that works, you do have a custom /msg alias somehow, it's possible you have a local custom /msg alias, which I think $isalias wouldn't have found, but that's unlikely.

#mircscripting @ irc.swiftirc.net == the best mIRC help channel