Realistic sounding applause is not any more difficult to reproduce than any other sound. What most of the above posts are really commenting upon is the poor quality of the recording of audience applause. In a typical live recording setup, everything possible is done to eliminate audience noise (applause is included in this category). At some point during the concert when the band is not playing, the engineers "bleeds" crowd applause into the recording. This sample of applause is then edited, EQ'd, compressed and then reinserted throughout the final mix of the "live" recording. If you hear sudden changes in sound level whenever the applause kicks in, then they probably used this technique.
Applause: Bummer
Now that I have a rig I can call a "system", I often find myself looking up from a book or the computer or whatever to pay attention to a particularly involving musical passage. Finally, it ends and I think, 'wow, that was just right', or 'jeepers, Vladimir or Dizzy or _______ was right here a moment ago'. But if it's a live recording, the applause always brings me down. Never, not once have I heard applause on any audio rig that sounded like hands clapping. Baez "From Every Stage", Dizzy "An Electrifying Evening" and "Newport II", "Jazz at the Pawnshop", Horowitz at the Met", Clapton "Unplugged", nada. Am I opening the gates to hell pursuing realistic applause? Is it out there at $50,000 per? Should I care? Have I ruined anyone's day?