A vunerability has been reported in IE. A malicious user user can create HTML code containing an XML Java applet that will be able to access and send local files on a victim's system. This is due to an access control flaw in a legacy XML data source applet. What does this mean? Simply, this may allow to access a victim's local files and send them to the remote user.
There was no solution available from Microsoft at this time and disabling Java is the only workaround.
Reported by: Jelmer