First of all, you'll need to make sure your panel will use the entire JApplet size. Since JApplet uses a BorderLayout by default, that's not a problem. Just add the panel to the center of the JApplet (using BorderLayout.CENTER).
Now secondly, you'll need some Javascript to resize the
applet space inside your HTML as well. Let me know if you have the first part figured out, I'll then move this
thread to the HTML forum.