I used ur code which is as below but i did not got any error and applet got initilized:

import java.applet.Applet;
import java.awt.Color;
import java.awt.Graphics;
import java.awt.Image;

public class AppletSleep1 extends Applet implements Runnable {
Thread thread = null;
final static int width = 400;
final static int height = 300;
Image image;
Graphics graphics;
// bouncing lines member variables
int[] x1;
int[] y1;
int[] x2;
int[] y2;
int dx1 = 2 + (int)( 3 * Math.random());
int dy1 = 2 + (int)( 3 * Math.random());
int dx2 = 2 + (int)( 3 * Math.random());
int dy2 = 2 + (int)( 3 * Math.random());
static int first = 0;
final static int LINES = 50;
public void init() {

// create arrays to hold the line coordinates
x1 = new int[LINES];
y1 = new int[LINES];
x2 = new int[LINES];
y2 = new int[LINES];

// initialise the first line
x1[0] = (int)( WIDTH * Math.random() );
y1[0] = (int)( HEIGHT * Math.random() );
x2[0] = (int)( WIDTH * Math.random() );
y2[0] = (int)( HEIGHT * Math.random() );

// initialise all the other lines
for ( int i = 1; i < LINES; i++ ) {
x1[i] = x1[0];
y1[i] = y1[0];
x2[i] = x2[0];
y2[i] = y2[0];
}
image = createImage(width, height);
graphics = image.getGraphics();
}
public void start(){

// user visits the page, create a new thread
if(thread == null){
thread = new Thread( this );
thread.start();
}
}
public void stop() {
// user leaves the page, stop the thread
if(thread != null && thread.isAlive())
thread.stop();
thread = null;
}
public void run() {
while (thread != null) {
repaint();
try {
Thread.sleep(20);
}
catch(InterruptedException e ){
System.out.println(e);
}
}
}
public void paint(Graphics g) {
update(g);
}

public void update(Graphics g) {
// clear the background to white
graphics.setColor( Color.white );
graphics.fillRect( 0, 0, width, height );

// draw the lines
graphics.setColor( Color.red );
int line = first;
for ( int i = 0; i < LINES; i++ ) {
graphics.drawLine( x1[line], y1[line], x2[line], y2[line] );
line++;
if ( line == LINES ) line = 0;
}
line = first;
first--;
if ( first < 0 ) first = LINES - 1;
x1[first] = x1[line];
y1[first] = y1[line];
x2[first] = x2[line];
y2[first] = y2[line];

// copy buffer to screen
g.drawImage( image, 0, 0, this );
}
}