I am guessing that this is the problem.
In the "ReadMe.html" file for the flexstore sample app. it
"Right-click on the beige.css and blue.css files in the
Navigator and choose "Compile CSS to SWF." To support runtime
loading, but this is not an option when I right click on the file
within the Navigator view.
Rather than hard code this info. I would like to learn the
reason for it's malfunction.
There were slight changes to Flexstore with 2.0.1 which is a
free upgrade out a few days ago. It sounds like you are running 2.0
with 2.0.1 sample code. You'll need to either get the free upgrade
or use the 2.0 Flexstore code.