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As you said you would be using web service approach. I feel following would be good method to display web service data in Siebel Applets
1. Create Virtual Business Component (VBC)
2. Create Applet Based on VBC
3. Create Customer Business Service which will call web service and display data in applet
You can use “SIA Billing Extern Service” to minimize script. This Service uses input output in the form of integration object structure. So using it you can directly map web service output to VBC fields.