This week's book giveaway is in the Agile and Other Processes forum. We're giving away four copies of Real-World Software Development: A Project-Driven Guide to Fundamentals in Java and have Dr. Raoul-Gabriel Urma & Richard Warburton on-line! See this thread for details.
An applet is only allowed to make network connections to the host where it came from. So if the applet is hosted at www.xyz.com, and the chat server is at www.xxyyzz.com, the connection is not permitted. That's one of the consequences of applets living in a "sandbox" inside the browser. Have a look at the Applet FAQ for ways to get around those restrictions.
These are not the droids you are looking for. Perhaps I can interest you in a tiny ad?