One rule of thumb now is to avoid to use Java Applets. If we have to use it, we ahould make it as thin as possible. Please don't forget to bind all the downloaded files into a jar file. If you have done this way, please check if you can also add other supportive files into the jar file.

Another thing is to investigate your code. Have your closed all I/O connections timely?
As your server writes to the client, please use a buffer. Don't allow them shake hands frequently.

If your Applet just do some simply formatting, I suggest you consider if you can get rid of it.