Hi , I think that it can't be done with php, cause for breaking the file, this need to be loaded in the server so if there is the limit of 2Mbytes, you wont be able to load more, Remeber PHP is server Side so all the logic and all the process is made by the server the client just know pure HTML. with javaApplet is diferent cause the applet is full loaded into the pc client so all the logic is made in the client, and this applet can break the file in your PC memory (RAM), and then sends the firts breaked part to the server by sockets, or to some cgi script, or web service or even a php, and so on. And then with all the parts in the server a php script can join it again.
So i think that the only chance you have is to modify the java applet that you said, if you dont like the GUI or something like that, if you dont have acces to the sourcecode, you can try to decompile it, but thats illegal if there the applet is right protected, if not you can use "DJ Java Decompiler" I dont remember well the name of the program but with those words you can find it in google, and get the compile code that is in your machine, int "temporally internet files" somwhere in your hard drive.
I hope this could help, If you have questions just tell me (but send me a private message cause i dont often visit english forums)
I have never heard of a java applet that can do that. If you link me to it, perhaps I can mimic it in php.
PHP makes uploading, type/size control, and even creation easy, but not splitting/merging as far as I know.
If you link me to such a java applet, I may be able to help you.