I have beta 3 loaded on my akita and Dillo works even to browse the filesystem as well as open local files. It's the default dillo install that comes with beta 3 (v0.8.5-i18n-misc)
The url field for a local file on the SD card is ->
file://mnt/card/*whatever you want*
If you just use that, you should be able to see the directory structure of the card, and browse to whatever you need -- if you're typing in the full path, and there are spaces .. remember that you need to treat a space as "%20" as in
file://mnt/card/txt/leaves%20of%20grass.html