Where do I place the applet class files so that the browser finds them when it loads an HTML file with an APPLET tag?
In the simplest case where an applet is not in a package, the .class files and .html file will be located in the same directory.
If the applet is in a package, then you can think of the directory with the HTML file as the top-level of your CLASSPATH and you need to create subdirectories under that directory for each package level. For instance, if the package was com.jguru, you would need to create a com directory at the level where the HTML file was with a jguru directory under that, which then had the .class files in it.
Yet another way to package your classes is to use a JAR file, which is supported by both IE and Netscape browsers, or a .CAB file which is IE specific. These require you to use the ARCHIVE parameter or CABINETS parameter, respectively.