Yeah, that would be it. Can't you have it just activate a script, rather than an applet? I'm not all that familiar with Apple's driver.
You could use a third-party driver like USB Overdrive to simulate the keystroke itself.
I'm not sure launching an applet would be responsive enough for such a task, but there is a way to get around the problem you have: Make your applet an "invisible" app that doesn't show up in the Dock or get focus. You can do this by saving this script as an Application Bundle (not as just "Application"), and then editing its Info.plist to include this right after the first <dict> tag:
Code:
<key>LSUIElement</key>
<string>1</string>
After saving the changes, move the applet to a different folder, and it should work.
But again, I doubt it would be responsive enough.