What is difference between trusted and untrusted applet?

A trusted applet is one which signed by a trusted authority. The trusted applet is installed on the local hard disk, in a directory on the CLASSPATH used by the program that you are using to run the applet. Usually, this is a Java-enabled browser, but it could be the appletviewer, or other Java programs that know how to load applets.

The applet is signed by an identity marked as trusted in your identity database.By default all applets downloaded in client browser are untrusted.

-They cannot read or write files to clients' local file system at all.

-They cannot start a program at client's machine.

-They cannot do network operations i.e. cannot do Socket programming.

-They cannot load libraries and use native codes.