ok, I'll start at the beginning
first off, make sure you get the newest version of Java. Chances are you have it already, but if not, you won't be able to save your work! Oh noes! (if this happens, don't panic, hit "Print Screen" and paste it somewhere. It won't end up on the OBBS, but your hard work won't be in vain.
OBBS-how2-1.jpg shows a screencap of the "new picture" menu.
An important bit is the pixel dimensions. Either select from the drop down menu in the lower left, or enter your own using the two nearby dialog boxes. If you enter numbers there it will supercede anything selected by the drop-down. In this example I wanted something 500 pixels wide by 500 pixels tall (even though the drop down says 200x200).
Remember to enter a repaint password too. If you want to fix mistakes after you've saved out your drawing, you can always repaint later.
Then hit "paint" and it will take you to the applet itself.