If destroy() is called, is my Applet unloaded?

Not exactly. Remember that your applet is an object; an instance of your sub-class of the applet class. The memory holding your applet's data and class linkage information is the instance that is reclaimed. The bytecode (the .CLASS file--the class itself) remains along with static class data, and may be re-used to generate a new instance of your applet (if not pruned).