If it is PS6 - 18.104.22.168.0 or PS7 - 22.214.171.124.0 , you should install the latest OPatch from MoS portal . These patches have the fix for applets issue .
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Try adding this to config.cfg
Had the same issue, Srinath is right though about the patch because it solved my issue.
Thanks for all your responses.
Putting HtmlDataInputFilterLevel=none resolved the issue.Didn't have had to install the patch.
Danger!!! This flag:
Turns off detection for cross-site scripting attacks in user-generated fields:
With it off, people could put a <script> tag in a comments field and inject a CSS attack into your site. I'd recommend installing the patch instead.