Hello could any one tell me how to create a java applet and where to download Java sdk?

http://www.sun.com
try poking around at the site above and you should find the SDK.

my school has a Java class and they use the BlueJ IDE, apparently the teacher likes it (otherwise she wouldn't have picked that one, since she had to switch from the memory hogging Borland JBuilder :P).
http://www.bluej.org