I have the same problem. I can see the trace statement but can not stop at break point.
I have my action script in separate .as files (Action Script 3.0).
I have installed flash debugger 10.
The publish settings are set to allow debugging and allow trace statements.
I run the remote debugger for 3.0.
Open my browser (IE8), it asks me to connect to the Localhost which I do.
I can now see the trace statements as I play around with my .swf.
However even though I have set breakpoints in the AS it is not stopping at them.
This is my problem why can I see the trace statements but it doesn’t stop at the breakpoints.
I am using Flash CS4 and the files are being exported as flash 9 with AS3.