Actually, you don't need to install a browser at all, because all versions of Windows come with a browser Active X control. A lot of people don't realize that Internet Explorer itself is basically a group of Active X controls, and has been for quite some time.
You can call this control from Director or Authorware, and use it to embed Flash or HTML, either of which can either be local or web-based. I recently produced a CD that does exactly that - in fact, what it does is detect an internet connection by trying to read a file on a web site. If it parses the file within a certain amount of time, it knows it's online and downloads the latest content; otherwise it runs what is on the CD. I have a user base of 5,000 and so far no one has had a problem.
There are tutorials that come with Authorware that tell you how to do this, and I'm sure there is Director help with this as well.
Another cool thing about this solution is that it uses whatever the most current browser is. I believe Microsoft made IE into an Active X control with version 4, before that it was an OLE object (I think). Ever since then, it's been scriptable by Macromedia products that can send messages to Windows controls.
There is no alternative for the Mac platform that I know of that does this too, if anyone knows of one I'd love to hear it. I suspect it would be possible to embed something like Opera in Mac OS X, but I don't know for sure.
By the way, it is quite possible with this method to create your own web browser, with back buttons, refresh, even a location bar! I have seen many fine examples of this.
Check out the URL here for more info on Active X in Director. If you're like me, you'll be freaked out with how powerful this is...have fun!
Referring URLs
http://www.macromedia.com/support/director/how/d65/tutorial/activex/control_xtra02.html
