From the error it seem that your AIR-SDK hasn't overlayed correctly. Can you please try updating your SDK ? Check this out http://18.104.22.168/wiki/index.php/AIR_2:Release_Notes#How_to_Update_Flash_CS4_to_Use_the _AIR_2_Beta_SDK
Actually I figured out the answer. This actually demonstrates a bug in the Flash Compiler; I was importing flash.net.DatagramSocketDataEvent, but this symbol is actually found in flash.events.... so why the compiler didn't warn me that flash.net.xxx didn't exist is a mystery, seems obvious to me that an imported symbol better exist else it is a typo.
so problem solved but it seems like Adobe needs to improve their compiler.