Deciphering...
Flash: cross-comain policy files
Flash: cross-comain policy files
September 10, 2003: Cross domain policy files: "The purpose of this technote is to highlight new security restrictions in Flash Player 7 that can: cause a warning dialog to appear when playing Flash Player 6 and older format .swf files; cause data loading to fail in Flash Player 7 format .swf files." There's a bit more on Flash 7 security on MM DevNet.
And this seems to be causing some trouble with web-services. Oops!