ActiveX

Using Html/Javascript you can only select files using the file upload html component (I think Flash / Silverlight wrap this to make things easier but its still sandboxed)
You can however use Java Applets (orwhatever they are called these days), Native ActiveX controls or .Net Controls to provide additional functionality (this hase security implications and required VM/Runtimes Frameworks etc)
Adobe Air or other client side technology might work, but looks like you want to do this in JavaScript. In this case, uploading the file to the server and manipulating from there is the best bet.