Thanks a lot for your reply. I am setting up for remote host not local.
I have a local setup working fine and now I want to configure it so i can work directly on the server hosting my site.
But perhaps this is not the intention with the new flex server settings?
For flash builder to work correctly with your server, it will need file system access to the webroot. If this webroot is on a remote server, then the remote folder needs to be mounted on the local file system (Connect to server functionality in Finder) and then the local mount point needs to be specified as the web root. The URL will however be that of the remote server.
Please log an enhancement request for us to track this issue to see how we can improve the developer workflow in FB for use cases where the user has only FTP access to the web root.