To recreate the problem, do this:

#Create an instance of a Firefox webdriver
from selenium.webdriver.firefox import webdriver
wd = webdriver.WebDriver()

#Create a local html file located at path
open.(path, 'w').write(html)

#Load the file with the webdriver
wd.get(path)

This produces the following error:

wd.get(path)
  File "/usr/local/lib/python2.7/dist-packages/selenium-2.21.3-py2.7.egg/selenium/webdriver/remote/webdriver.py",
line 165, in get
    self.execute(Command.GET, {'url': url})
  File "/usr/local/lib/python2.7/dist-packages/selenium-2.21.3-py2.7.egg/selenium/webdriver/remote/webdriver.py",
line 153, in execute
    self.error_handler.check_response(response)
  File "/usr/local/lib/python2.7/dist-packages/selenium-2.21.3-py2.7.egg/selenium/webdriver/remote/errorhandler.py",
line 147, in check_response
    raise exception_class(message, screen, stacktrace)
selenium.common.exceptions.WebDriverException: Message: u'Component returned failure
code: 0x804b000a (NS_ERROR_MALFORMED_URI) [nsIIOService.newURI]'

If, however, a URL is loaded with wd.get(url), I CAN load a local file.

Selenium version: 2.21.3
OS: Ubuntu
Browser: Firefox
Browser version: 12