Applet Connectivity - PLEASE help

OK, I'll say right up front I'm a postgres novice at best.
I've spent quite some time researching this tonight and trying out a few
things to no avail.
The basic question is can an applet connect to a postgres database and
if so how (I need specific details)?
Postgres, the database, the web server and signed applet are all on the
same machine.
I'm using Postgres 8.2 and Java 1.5 w/ the postgresql-8.2-504.jdbc3 jdbc
driver.
The software works when run through my IDE (Eclipse) but not as an
applet in a browser.
I've set listen_addresses = '*' in postgresql.conf and my pg_hba
settings are:
local      all      all                               md5
host       all      all         127.0.0.1/32          trust.

Here's the code I'm using to try to make the connection where
strServer = :jdbc:postgresql://localhost/Arco
strDriver = org.postgresql.Driver
strUser = postgres
strPswd = fred

    public DBConnection(Trace trace, JApplet p_applet)
        throws Exception
    {
        URL    dbIniURL;
        URLConnection  urlConn;
        BufferedReader in;
        int            vals = 0;
        String         nextVal;
        String         strProp;
        String         strVal;
        String         strUser = "";
        String         strPswd = "";
        int            pos;
        Properties     props = new Properties();

        try
        {
            System.out.println("Instantiate DBConnection.");

            dbIniURL = new URL(p_applet.getDocumentBase(), "db.ini");
            urlConn = dbIniURL.openConnection();
            in = new BufferedReader(new
InputStreamReader(urlConn.getInputStream()));

            while (vals < 4)
            {
                nextVal = in.readLine();
                vals = vals + 1;

                System.out.println("db.ini: " + nextVal.trim());

                pos = nextVal.indexOf(":");

                if (pos>0)
                {
                    strProp = nextVal.substring(0,pos);
                    strVal = nextVal.substring(pos+1);

                    if (strProp.compareToIgnoreCase("Server") == 0)
                    {
                        strServer = strVal;
                    }
                    else if (strProp.compareToIgnoreCase("Driver") == 0)
                    {
                        strDriver = strVal;
                    }
                    else if (strProp.compareToIgnoreCase("User") == 0)
                    {
                        strUser = strVal;
                    }
                    else if (strProp.compareToIgnoreCase("Password") == 0)
                    {
                        strPswd = strVal;
                    }
                }
            }

            drv = (Driver)Class.forName(strDriver).newInstance();
            DriverManager.registerDriver(drv);


            props.setProperty("user",strUser.trim());
            props.setProperty("password",strPswd.trim());

            System.out.println("Attempting to connecting to postgres
db...");
            dbConn= DriverManager.getConnection(strServer, props);
            System.out.println("Connected to postgres db.");
        }
        catch (IOException ioe)
        {
            System.out.println("Error trying to connect to postgres db:");
            ioe.printStackTrace();
            throw new Exception(ioe.getMessage());
        }
    }

The error I get in the console is:
Java Plug-in 1.6.0
Using JRE version 1.6.0 Java HotSpot(TM) Client VM
User home directory = C:\Documents and Settings\Marc


----------------------------------------------------
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
p:   reload proxy configuration
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>
----------------------------------------------------

Init applet.
Call new DBConnection.
Instantiate DBConnection.
db.ini: Server:jdbc:postgresql://localhost/Arco
db.ini: Driver:org.postgresql.Driver
Attempting to connecting to postgres db...
org.postgresql.util.PSQLException: Something unusual has occured to
cause the driver to fail. Please report this exception.
    at org.postgresql.Driver.connect(Driver.java:276)
    at java.sql.DriverManager.getConnection(Unknown Source)
    at java.sql.DriverManager.getConnection(Unknown Source)
    at db.DBConnection.<init>(DBConnection.java:169)
    at ui.BaseApplet.init(BaseApplet.java:138)
    at sun.applet.AppletPanel.run(Unknown Source)
    at java.lang.Thread.run(Unknown Source)
Caused by: java.security.AccessControlException: access denied
(java.net.SocketPermission 127.0.0.1:5432 connect,resolve)
    at java.security.AccessControlContext.checkPermission(Unknown Source)
    at java.security.AccessController.checkPermission(Unknown Source)
    at java.lang.SecurityManager.checkPermission(Unknown Source)
    at java.lang.SecurityManager.checkConnect(Unknown Source)
    at java.net.Socket.connect(Unknown Source)
    at java.net.Socket.connect(Unknown Source)
    at java.net.Socket.<init>(Unknown Source)
    at java.net.Socket.<init>(Unknown Source)
    at org.postgresql.core.PGStream.<init>(PGStream.java:59)
    at
org.postgresql.core.v3.ConnectionFactoryImpl.openConnectionImpl(ConnectionFactoryImpl.java:77)
    at
org.postgresql.core.ConnectionFactory.openConnection(ConnectionFactory.java:66)
    at
org.postgresql.jdbc2.AbstractJdbc2Connection.<init>(AbstractJdbc2Connection.java:125)
    at
org.postgresql.jdbc3.AbstractJdbc3Connection.<init>(AbstractJdbc3Connection.java:30)
    at org.postgresql.jdbc3.Jdbc3Connection.<init>(Jdbc3Connection.java:24)
    at org.postgresql.Driver.makeConnection(Driver.java:382)
    at org.postgresql.Driver.connect(Driver.java:260)
    ... 6 more

I think that covers it. I'm pretty wiped out being as I've been working
on this for about 4 hrs now.
Your help is really appreciated!

Thanks,
Marc