Differences between Applets and Applications:
Classically, the word applet has come to mean any small application. Within java, an applet is any java program which is launched from a web document; that is, from an HTML file. Java applications, alternatively, are programs which run from a command line, independent of a web browser. A size or complexity of a java applet has no limit. Actually, java applets are in a few ways more powerful than java applications. Therefore, with the internet, where communication speed is limited and download times are long, most java applets are small through necessity.
The technical differences among applets and applications stem from the context in that they run. A java application runs in the easiest possible environment-its only input from the outside world is a list of command-line parameters. Alternatively, a java applet receives a lot of information from the web browser. It requires knowing when it is initialized, when and where to draw itself in the browser window and when it is activated or deactivated. As a consequence of these two extremely different execution environments, applets and applications have different minimum needs.
The decision to write a program as an applet versus an application depends on the context of the program and its delivery mechanism. Since java applets are always presented in the context of a web browser's graphical user interface (GUI), java applications are perferred over applets when graphical displays are unnecessary. For instance, an HTTP server written in java requires no graphical show; it requires only file and network access.
The convenience of web protocols for applet distribution creates applets the preferred program type for Internet applications, while applications could simply be used to perform several of the similar tasks. Along With java, writing Internet-based software, either as applets or applications, is extremely simple. Non-networked systems and systems along with small amounts of memory are much more likely to be written as java applications than as java applets.
Difference among Java applets and application
You should think one other main factor when deciding applet or application. If you are using characteristics of newer java versions, you required to wait until browsers support the capabilities. Along With an application, you can give the Java Runtime Environment. Therefore, inside an applet, you can only use the capabilities a browser offers. Within an Internet environment, you could expect users to still be using older browser versions that do not support to be more control over software versions, you can know what versions are available and develop accordingly. Also, you might need to consider using Sun's Java Plug in product that can automatically update the Java version of browsers when a new version becomes available.