Any kind of music in java applets is based on com.sun.audio (.au and .wav files ) or JMF ( java2 and plug-in ). Streaming .mp3 would be very costly in terms of processing, and read audio would be out of the question ( there are no codec''s for it ). You could imbed the sound into the web page where the applet lives and alter it''s state with java-script calls ( http://www.javaonthebrain.com for example ).
I will be working on a generic audio library for java games soon. I''ve just been busy profiling video routines.