Java applets are either greatly limited in capability or have full access to the underlying system.
This is circumventing the applet/plugin paradigm and allowing full Java programs without security being an issue, as they only have access to the virtual system.
The problem I see there is the resources necessary when you have multiple tabs open. If you are forking the web browser, it would make sense to provide a HAL as part of the sandbox and run in a different process.
Yes, I think the VM overhead wouldn't be as big a deal as the programs themselves though. People would have to realize that applications are "heavyweight." Not sure if HAL would introduce security issues, the VM is to keep things as secure as possible.
HALs will always introduce security issues. I believe Microsoft Research has been working on that particular problem with Singularity, it would pay to take a look at what they did there.
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