To enable the use of local image files as textures in chrome on Windows 
you can start chrome with the -allow-file-access-from-files for example in a console window you can type:

"C:\Program Files (x86)\Google\Chrome\Application\chrome.exe" --allow-file-access-from-files

Note that there must be no other version of chrome running for the flag to be applied.
Also this will run chrome in the directory you are in in the console window.
So to access files in a directory C:\Users\farrell\Desktop\07 for example you need to 
cd C:\Users\farrell\Desktop\07
before running chrome.  You can then drag and drop html files into chrome and it should work.

A more elegant work around would be to using the window system 
1) go to C:\Program Files (x86)\Google\Chrome\Application\ 
2) make a shortcut to chrome.exe 
3) open the properties of the shortcut and add   
--allow-file-access-from-file 
to the target 
4) copy the shortcut to your development directory


You can now click on the shortcut in your development directory and then drag and drop the html file into it, since
it will then run in the development directory and load files from (relative to) there.

Remember you should not add  --allow-file-access-from-files  to the normal chrome, since that would open a security hole in it that could sllow malevolent sites to access your machine.