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Anyone seen this pop-up window asking you to authorize "local storage"? It's new, and looks bogus. Even clicking "Deny" doesn't make it go away. What's up with that?
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This is a standard Flash dialog requesting additional storage. This page describes how this works and what options you have:
http://www.macromedia.com/support/documentation/en/flashplayer/help/help02.html
And this page allows you to make these changes globally.
http://www.macromedia.com/support/documentation/en/flashplayer/help/settings_manager03.html