There are other questions on this same topic, but I'm finding that on 4.0.4 with my HTC One, I can open
file:/// URLs just fine with Firefox, but not with Chrome or the Android browser. Those two simply report a security error and show no content.
Is this something that changed since the 2.x era when it was apparently possible? (edit well I realize there was no Chrome for 2.x but ...)
edit — sorry; false alarm. It works fine.
All the visible directories on the phone - those you browse through with a file explorer, or when you mount the device as mass storage - are under a top-level directory called "sdcard". Thus, if you create a folder at (apparently) the top level, then a file in it must be accessed as:
Probably most people know that already :-)