+1  A: 

From the Windows help (if you click "More Information" from the Information Bar context menu):

To stop the information bar from blocking file and software downloads

  • Click to open Internet Explorer.

  • Click the Tools button, and then click Internet Options.

  • Click the Security tab, and then click Custom level.

  • Do one or both of the following:

    • To turn off the Information bar for ActiveX controls, scroll to the ActiveX controls and plug-ins section of the list, and then, under Automatic prompting for ActiveX controls, click Enable.

    • To turn off the Information bar for file downloads, scroll to the Downloads section of the list, and then, under Automatic prompting for file downloads, click Enable.

  • Click OK, click Yes to confirm that you want to make the change, and then click OK again

The XML viewer (that colors and adds expand/collapse) is an ActiveX control included with IE. Note that disabling the security warning for this control will disable all warnings for ActiveX controls which may not be a good thing. It sounds like you'll still get a warning for first time use of a control (see the additional "Allow previously unused ActiveX controls to run without prompt" option), but I can't confirm that.

boyhowdy
I don't want to disable the yellow security bar *globally* - I just want to disable it when viewing local XML files. IE itself is injecting the (useful) javascript for the element expand/collapse button. It's safe.
Tim Danner
Do the same thing as what boyhowdy suggested, but select "Local Intranet" before tweaking anything.
Brian
+3  A: 

The previous suggestions on this page didn't work for me. I found the answer on this page

To summarise, go into Internet Options > Advanced then down to the Security section, and tick the box for "Allow active content to run in files on My Computer*"

The * means the setting only takes effect after Internet Explorer is restarted.

Red Haze
Thanks! That's the setting I was looking for.
Tim Danner