Java Applets could not start

I could not run a webapplication  that requires a java client. I get the following error:Applet could not start: An error has occurred attempting to communicate with a java applet. Java applets and the features associated with them have been disabled. getChildrenFromApplet failed
I have tried to run the application on Firefox and IE and get the same error. My computer is part of a domain. Can GOP cause this issue?

Java Plug-in 1.6.0_16
Using JRE version 1.6.0_16-b01 Java HotSpot(TM) Client VM
User home directory = C:\Documents and Settings\Administrator.HHTEMPORARY

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c:   clear console window
f:   finalize objects on finalization queue
g:   garbage collect
h:   display this help message
l:   dump classloader list
m:   print memory usage
o:   trigger logging
q:   hide console
r:   reload policy configuration
s:   dump system and deployment properties
t:   dump thread list
v:   dump thread stack
x:   clear classloader cache
0-5: set trace level to <n>
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Wed Oct 28 09:01:34 EDT 2009 XYZFileSystemBrowserApplet loaded on Wed Oct 28 09:01:34 EDT 2009
Wed Oct 28 09:01:34 EDT 2009 Entering getChildrenFromAppletAsString
Wed Oct 28 09:01:34 EDT 2009 Searching directory
Wed Oct 28 09:01:34 EDT 2009 No parent specified, getting system starting directories
Wed Oct 28 09:01:34 EDT 2009 Files/directories found:
Wed Oct 28 09:01:34 EDT 2009 C:\Documents and Settings\Administrator.HHTEMPORARY\Desktop\
Wed Oct 28 09:01:34 EDT 2009 C:\Documents and Settings\Administrator.HHTEMPORARY\My Documents\
Wed Oct 28 09:01:34 EDT 2009 C:\
Wed Oct 28 09:01:34 EDT 2009 E:\
Wed Oct 28 09:01:34 EDT 2009 R:\