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Allowing Flash Movies in a browser from the internet read a local drive is an unwelcome potential for internet users. As such Flash has sandbox restrictions that would prevent that. Unfortunately Flash does not have permission granting in it.
You need to read the information in Flash help on the commands you are using to load data and they will point you to the sandbox issues and links to read more.
If your project has a 3rd or 4th Q 2007 delivery, you might investigate AIR (Adobe Integrated Runtime formally Apollo). The user grants permission to the application as installed and the app then can communicate all over the place. A bit higher development risk since this is new technology, but you can download the beta and investigate.
What made me hesitate was Flash's ability to connect to the user's microphone and camera. How can that be possible then?
You are right, Flash does have a permission for the camera and microphone and the Flash cookie storage. Once permission is given by the user to any combination of these items, there is still boundaries as to what the Flash app can do with the camera, microphone and cookie storage.
It does not have a permission to allow access to the local file system when the Movie is on another domain. It can access the file system when the Flash movie loads from the local system but that may be restricted if the Flash movie also has functionality to send to remote system.
Review this and see what alternative you have using the Flash player as is:
Fash 8 Security
Alright. It makes sense. Thank you!
I'll be reading the link.