JDK112e appletviewer is not able to create the .hotjava preferences directory on a Windows 95 PC. Invoke appletviewer with any .html file and this is the message you will see:

Creating C:\\.hotjava directory ...
C:\\.hotjava: Permission denied

The problem does not appear on a Windows NT PC. When JDK111 appletviewer creates the .hotjava preferences directory you see this message:

Creating C:\.hotjava directory ...

So perhaps the extra \ is the cause of the problem.