The HTML5 specification includes a File API that enables the reading of local files. As far as I know, this feature is supported in Firefox (version 3.6 onwards) and Chrome browsers. However, I am unsure about its compatibility with other browsers at the moment. If you need to ensure compatibility with different browsers, you may need to consider using alternatives such as Flash, although I personally have no experience with that.
It is worth noting that by default, Chrome restricts access for local files to interact with other local files - each file is treated as if it belongs to a separate domain. To override this restriction, one can explicitly enable access by launching Chrome with the --allow-file-access-from-files
flag.
If you are interested in learning more about the File API and exploring practical examples, I recommend checking out this informative guide: http://www.html5rocks.com/en/tutorials/file/dndfiles/.