FFT can stand for many things.
In this case, it stands for Fast Fourier Transform.
The applet allows you to paint on either a blank canvas or one of the image files by selecting an option and then clicking the "Load" button. Holding down the Control button while painting switches to fancy-mode. The FFT button switches from the spatial to the frequency domains of the image, either of which can be edited. Manipulations of the frequency domain edit both the real and imaginary components of the power spectrum.