If you set NoRun to a 1, the user will not be able to view local files by typing a file address or URL (file://c:\....) into the Address box.

Setting NoRun to 1 will also prevent access to the local file system from an embedded HTML link.

You could also implement the NoDrives registry value to totally inhibit access to a local drive.

In addition, for compatibility with the various versions of IE 4.x, navigate to:

HKEY_CURRENT_USER\Software\Microsoft\Windows\CurrentVersion\Policies\Explorer

Add Value name NoFileUrl as a type REG_DWORD and set the data value to 1, to prevent use of the file://c:\.... syntax in the Address box.