Create an offline app that can browse my local dropbox directory?

Is this possible?

Could I let the end user select where their dropbox directory is? (I notice there is a browse to local directory option).

Then I use my PHP script to recursively loop through the directory structure creating browsable web pages of content.

EDIT

I just noticed this question

Im not sure if related but actually what I’d really like to do is let end users install myMagicScript.exe then bookmark a webpage wwww.mymagicscript.magic that uses the localserver engine to power my offline web app without using the GUI.

Again would like to know if this will be possible with 2.0?

Sure, you can do it with an HEScript call, retrieve the name of the folder and use the value in your PHP script.
You can start with the sample here:
http://www.exeoutput.com/help/choosingfilesupload

Instead of asking for a filename, just use

function SelectDirectory(const Caption: String; const Root: String): String;

from http://www.exeoutput.com/help/scriptreference

instead of OpenFileDialog in the HEScript script.