An applet can only connect to the host where it's served from, so if it is hosted on localhost, then it will not be able to connect to any other machine. The way around that is to either sign the applet, or fiddle with your local security policy. Both approaches are HowCanAnAppletReadFilesOnTheLocalFileSystem]described here[/url].
I’ve looked at a lot of different solutions, and in my humble opinion Aspose is the way to go. Here’s the link: http://aspose.com