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[ BUILD # : 201011140001 ] [ JDK VERSION : 1.6.14 ] open the swing set 2 demo (mine is at file:///C:/jdk1.6.0_14/demo/jfc/SwingSet2/SwingSet2.html) within the embedded browser. You will find that the applets are not rendered.
So is the case with using object/embed tags for rendering applets. If it is of any help, I am able to see flash content (you tube videos) being rendered correctly, though they are sluggish.