Well, for a web application, applets are far from a good choice. They do however have a particular niche of their own. Corporate intranets is one of the best examples.
If you want to go ahead with java, there are some wonderful technologies and frameworks available. However, you might find difficulty in finding economical and reliable hosts, unless you take the dedicated route.
I would suggest that you stick with any of the popular scripting languages. Unless your application deals with distributed transactions, requires a high level of concurrency and other such enterprise requirements, you do not want to take the java route. Development time will be signifincalty shorter with most of the dynamic languages. (I am not sure about PHP, but python would be a good choice for such applications)
Performance wise, I am guessing that java would be far superior to PHP. This again is highly subjective. Let me just say that java starts to show its superiority as the complexity of the application increases.
Ruby, I've read is a well designed language. Comparable more in terms with Python. However, its standard library is not as mature and complete as compared to Python. RoR will suit your requirement just fine. It might be the best RAD platform right now, but I am pretty sure that it is not going to survive for long unless there is a major rewrite of the base code. RoR is a big bloated beautiful beast
