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There could be several reasons why a Java applet is not functioning in IE8. Here are a few common causes:

1. Java is not installed or enabled on the browser: Ensure that Java is installed and enabled in the browser. To check if Java is enabled, go to the browser settings and check if the Java plugin is enabled.

2. Security settings: Check if the browser's security settings are set to block Java applets. Try lowering the security settings and see if the applet works.

3. Compatibility view: If the browser is running in compatibility mode, the Java applet may not function properly. Try disabling compatibility view and see if it helps.

4. Outdated Java plugin: Sometimes, an outdated or damaged Java plugin can cause issues with applets. Try updating the Java plugin to the latest version.

5. Other browser extensions: Some browser extensions may conflict with the Java plugin and prevent it from functioning properly. Try disabling other extensions and see if it helps.