BlueSky is correct. JavaScript that runs in the browser does not have access to either a local or server-based file system. For that you need either: (1) a classic server-side programming language (ala BlueSky's notes for PHP, ASP.NET, ColdFusion, etc.) or (2) a site that runs the Jaxer server from Aptana, which is an open-source server running JavaScript on the server. Outside of those two sets of options, you would not be able to pull images dynamically from a folder (or database or XML file, etc.). You can, however, use jQuery to create the previews as you mentioned...once you get you images pulled that is!
Do you know what server-side technologies your web host provides? I'm sure I (or someone on the list :) could offer some assistance in the type of server-side script you'd need to extract all the files or images in a directory.
