Last week, we had the author of TDD for a Shopping Website LiveProject. Friday at 11am Ranch time, Steven Solomon will be hosting a live TDD session just for us. See for the agenda and registration link
Don't use null as the Component you are showing the Open Dialogue over. You will have to find the name of the enclosing class and pass EnclosingClass.this, or EnclosingClass.this.openButton instead. That way you get the Open Dialogue centred over the Component you are using. If you prefer, pass the identifier of a local variable, but you will probabaly have to declare that variable as final.
I presume you have gone through [URL=http://java.sun.com/javase/6/docs/api/javax/swing/JFileChooser.html]the API documentation for JFileChooser[url], and the "how to" link provided. You have obviously found the return value from the showOpenDialog() method, but the value does not mean that you have found a file; it means which button you clicked on the open dialogue. So you will have to put an if block round the bit about selected file. You might need to move the declaration elsewhere, so the File will still be in scope when you use it.
Can't see anything else wrong with your method at present. Try that and see whether it works. It is surprising that you can open files in the project folder and not elsewhere; there might be something else going wrong which you have missed.