HotJava is a Web browser implemented in Java. Java is an interpreted language. Little chunks of Java code are sent through the net to the browser and when appropriate they execute, right there on the user's machine. Those little chunks of code are called applets. In current Web browsers, text, graphics, and sounds just sit there.
Applets can make the graphics animate, the sounds play, and the text move.
This is a mouthful any way you slice it. However, the body of the white paper is interestingly written and goes on to explain the relevance of each of the admitted buzz words to Java. Java's result is the ability to interact with graphics, sounds, and text in new and compelling ways. For example, a cube appearing on the Web document page can be spun around, a button will detect the presence of a cursor, buttons can highlight when a cursor is near, and image maps can show you where those invisible hot spots really are. The JDK includes a nice utility called the appletviewer.