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The update framework from AIR 1.5 was sensible to the Flex version used to compile the application. For example, Flex 3.5 triggered the same problem you are seeing. Flex 3.5a solved it.
But, the best way to fix it, is to use the update framework from AIR 2 SDK, which fixes these incompatibilities (it is compatible with every Flex version 3.x and 4.x).
Now we've really hit a wall. Using the advice suggested we repackaged the 1.9 version of the application and published it for auto update. While this version *fixed* the bug causing the problem, the underlying error still persists.
The install base for this application are using v1.6-1.8, all of which were seemingly created with the bug present, thus preventing our rollout of the corrected version of the application to eliminate the "blue screen" bug.
Are there any suggestions on how we can get around this error - other than having the userbase delete the old application and re-install the new, corrected version.
We have tried directing Users to the update badge to replace the old versions of the app with the newest release - to admitedly mixed results.
Some users are reporting a successful upgrade to the new application, others are experiencing the "Sorry an error has occurred, the application failed to Launch or re-launch properly message".