Problems with the java plugin running in IE 5.5 on Win 2k sp2 not working.
1) remove CLASSPATH
2) remove all other VMs from the PATH
3) make sure JIT is checked in plugin control panel.

when the plugin is working u should get a duke icon in the system tray. you can double click the icon for the console.

\lib\security\java.policy - this file, in the jre, is used to give the plugin permissions. it's an alternative to signing the applet.
Here is an example of stuff you can add in the grant block:
permission java.io.FilePermission "C:/WINNT/SYSTEM32/ipconfig.exe", "execute";
permission java.lang.RuntimePermission "queuePrintJob";