There's been other threads discussing this and I wondered if this issue be eventually sorted?
I had the same problem as the other people (PHP application developped locally) and lost a day's work trying to figure out what the problem was.
Adding localhost and 127.0.0.1 to the privacy site list doesn't work.
Leaving the ad blocking(??) on doesn't work
Disabling privacy for browser in progam control IS NOT AN OPTION
Operating System:Windows XP Pro
Product Name:ZoneAlarm Internet Security Suite