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Allow scripts and ActiveX controls in IE7 for local files

I am developing a website on my computer and storing the files on my C: drive.  When I double-click the .html file to view my work, I always get this annoying warning at the top of the web page area: "To help protect your security, Internet Explorer has restricted this webpage from running scripts or ActiveX controls that sould access your computer.  Click here for options...".  Well, duh.. I'm already accessing my computer.  This seems silly.  I have alread tried going to Tools->Internet Options->Security; Local Intranet, Advanced and added "file://c" and "file://documents and settings".  Also set custom security settings to allow all scripts and ActiveX controls.  Still get the warning.

How do I disable this and allow any content on my local hard drive to be shown without warning?  
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Badotz
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Are you SERVING your files to the browser via IIS (or Apache or...) or simply VIEWING your files directly from Explorer?

It makes a difference.
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I am viewing the files directly from my computer.  Address bar: "C:\WebSites\...\index.htm"
If you do not serve your files, then IE does not know exactly how to interpret them. Javascript will not work, but some basic HTML might.

Do you have IIS (or Apache or...) on your machine? If so, create a virtual directory for your web files and browse from

http://localhost/YOUR_VIRTUAL_DIRECTORY/index.htm
That would sort of solve my problem.  You see, I am using MS Expression Web 2, and the button for testing websites just opens the file directly from the folder the web site is created.  Nevertheless, I will try.  I do have Win XP Professional, but seem to have forgotten how to get to the IIS conifguration app.  Could you direct my how to do this?
Also, just curious... Why, if you go under Tools->Internet Options, Click on "Local intranet", click on advanced, you are allowed to enter sites like file://C and file://documents and setttings , etc.

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Badotz
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Although this does not allow me to open files on my computer directly with IE7 (no problem with Firefox), it's a solution I think I can live with.  I just need to figure out how to configure Expression Web 2 to use http://localhost/... instead of the file directly.  Thanks.