Plain Old Webserver (POW) is a fully-functional open source (GPL) webserver that works inside your browser. It uses Server Side Javascript (SJS) to deliver dynamic content.(It also runs stand-alone on XULRunner, which is how I ran across it.)
This basically lets you take a dynamic website and run it offline. It's a lot like Google Gears, except that instead of being just an API meant to make it easy to take a web application temporarily offline, it's actually a full-bore web server. There are some intriguing possibilities.