If you want to access local system resources using java applet you may get error something like bellow:
java.security.AccessControlException: access denied (java.util.PropertyPermission user.home read)
To solve this problem you need to signed your applet. Bellow the steps describe the creation of a self-signed applet. This is useful for testing purposes. For use of public reachable applets, there will be needed a “real” certificate issued by an authority like VeriSign or Thawte.

The applet needs to run in the plugin, as only the plugin is platform- and browser-independent. And without this indepence, it makes no sense to use java…

1. Create your code for the applet as usual.
It is not necessary to set any permissions or use security managers in
the code.

2. Install JDK 1.3
Path for use of the following commands: [jdk 1.3 path]\bin\
(commands are keytool, jar, jarsigner) Password for the keystore is any password.

3. Generate key:
keytool -genkey -keyalg rsa -alias tstkey
Enter keystore password: *****
What is your first and last name?
[Unknown]: Your Name
What is the name of your organizational unit?
[Unknown]: YourUnit
What is the name of your organization?
[Unknown]: YourOrg
What is the name of your City or Locality?
[Unknown]: YourCity
What is the name of your State or Province?
[Unknown]: YS
What is the two-letter country code for this unit?
[Unknown]: US
Is CN=Your Name, OU=YourUnit, O=YourOrg, L=YourCity, ST=YS, C=US
[no]: yes


Enter key password for tstkey
(RETURN if same as keystore password):

(press [enter])

4. Export key:
keytool -export -alias tstkey -file tstcert.crt

Enter keystore password: *****
Certificate stored in file tstcert.crt

5. Create JAR:
jar cvf tst.jar tst.class
Add all classes used in your project by typing the classnames in the
same line.

added manifest
adding: tst.class(in = 849) (out= 536)(deflated 36%)

6. Verify JAR:
jar tvf tst.jar

7. Sign JAR:
jarsigner tst.jar tstkey
Enter Passphrase for keystore: *****

8. Verifiy Signing:
jarsigner -verify -verbose -certs tst.jar

9. Create HTML-File for use of the Applet by the Sun Plugin 1.3
(recommended to use HTML Converter Version 1.3)
You can use this signed jar in applet like bellow:

applet code=AppletClass.class
width=200 height=100

10. Delete existing certificate:

keytool -delete
 -alias keyAlias
 -keystore keystore-name
 -storepass password

Source: forums.sun.com