It's got to be a problem with local vs remote; I've tried every path syntax variation I can think of, capitals, backslashes, /// vs //
i did notice IE has implemented a notification bar action for this, and i was kinda wrong to say it works by default in all browsers. but, clicking the yellow bar and choosing allow did produce the expected results, so i guess i can still say it works in all browsers without configuration changes...
note that noscript, the popular firefox extension, blocks local files as a setting, so don't forget to change that if you need to.
IE8 sees them both, so if you don't need old IE, just the real one works.
all other browsers i tested only see the one.
anyways, tested IE8, FF3, S3w, O9.5:
also, don't forget that some OSs/configurations will not allow access to all folders unless the browsers is being run as an administrator and/or has user perms to the specified folder.