I'm working on an application that uses mprojector to create a desktop client app. ( yea, no apollo yet! ) Flash player used to be bundled into the application until a few days back, when we decided to use the drop flash player from the executable, and use flash player installed in the client machine. And ever since, video playback has stopped working on machines with flash player 9 installed. The FLVPlayback component would just keep showing the buffering bar. No download!
Publishing the application on mProjector V3 did the trick. So remember- If you used mProjector V2, and had some http download of videos in the flash application, either upgrade to mProjector V3, or bundle flash player 8 in your application.
May be this is not just with video downloads, but with the entire NetConnection object. Haven't tested yet. Am in a rush, gotta get back to work again!