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When I finished applet program, can I compile it as a .jar, or .war file so that its accessible via web?
A .war file is for holding the web components of a J2EE app. If you are just deploying an applet via an HTML page then use a .jar file.
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I need some files/*.txt/ to be loaded at applet start up - at the init() function, I need the applet to read the contents of the files according user preference. Is this option possible, to compile the text files together in the web archive /.war files/?
You don't compile the text files, but you can add them to a .jar or .war file and access them from your applet.