Hello trimba,
There are two ways to achieve this:
One way is add the following in view1.xsl and preview the form. Click on the link, then it will open "text.txt" in a new IE window.
<a href="\\machine name\C$\test.txt" target="_blank" xd:disableEditing="yes">link to local drive</a>
Another way is, in design mode, click on Hyperlink in the controls task pane. There by giving the link "\\machine name\C$\test.txt" in Address field, you will be able to open it in a new IE window.
Hope this helps!