I still don't see the XSS danger for my situation. I'm talking about an HTML file residing on the person's computer which is not set up as a webserver. There should be no more chance of XSS than for any other document on that person's computer (word file, excel file, text file, access database, etc.) If a person can modify this html file, then they are already inside the network and accessing the person's computer. That's a network security issue, not an XSS issue.
I do understand the dangers of XSS and am careful to keep event validation enabled and validate user input to prevent xss and sql injection. However, I consider myself only well-informed about the dangers. Therefore, I would like as full an explanation as you have time or interest in providing.
Lastly, if you can explain how to change my computer settings to allow cross-domain access or point me to relevant documentation on how to do so, I would appreciate it. I don't know that I am going to go forward with this but I would like to investigate it some more. I've already informed my client that this can't be done so I'm not on the hook for it but I would like to add it to my bag of tricks in case it does ever become necessary.
Thank you for your time and patience with this thread. I appreciate your comments. -- ZLA