The paddle is supposed to move whenever you move the mouse. So, you should expect to have to put some instructions in the "mouseMove" method to take care of the paddle when the browser tells you that the mouse has moved. The surprise is that you won't actually draw the paddle in mouseMove. Why? Remember that you placed a "clearRect" in "animate". This is necessary to remove old images of the ball from the screen. Since animate is invoked all the time, however, this "clearRect" would quickly remove any paddle drawn by "mouseMove".
The solution to this is to have "animate" draw the paddle at a location determined by a variable set by "mouseMove". The variable will keep track of the mouse's x coordinate the last time the browser invoked "mouseMove". So:
If you run your applet now, you should be able to control the paddle with the mouse. You will notice (possibly with some frustration) that the applet ignores the mouse if you move the mouse pointer out of the applet display area. You will also notice that the ball still bounces off the bottom no matter where the paddle is.