What are the differences between trusted and untrusted applets?
In addition, applets loaded over the network are prevented from starting other programs on the client. Applets loaded over the network are also not allowed to load libraries, or to define native method calls, providing accessing to the underlying computer.
On the other hand, trusted applets can be permitted to do all that. The trust model in Java allows you to enable only certain operations, so it is possible that you enable network connections to/from anywhere but don't permit access to the local file system.
For additional information, see the applet sequrity FAQ at http://java.sun.com/sfaq/.