1 - Will this mean that Java Applets that hail from 1990's are dead and not worth going back to?
With the update to the Java plug-in - all applets, not just JavaFX-based applets get the improved user experience and performance. That being said - I don't think there are many (if any) killer applets out there. If there were - JavaFX would never have been needed.
2 - Same with Java Desktop: What will be compelling for us Java Developers to use it rather than JavaFX?
If you are building GUI applications and want to run it in Java - in particular across multiple platforms (e.g. desktop, applets and mobile) as well as make it easier to work with someone who has actual Photoshop/GIMP skills - JavaFX is your best choice because it was designed explicitly for that type of process. However, remember JavaFX can call Java code and it can also make remote calls (either getting back XML or JSON). I think the most likely integration point will be to use JavaFX for UI and caching of results but all of the heavy coding logic will be on the server. Where it can be written in Java or .NET or assembler if you can get your assembler to emit XML or JSON :).
