I came across this thread in the archives, dealing with an HTML select box that did not work properly in an AIR utility window.
Since I just finished a mini ordeal around the same problem, I'd like to share:
When you activate an HTML popup (e.g. combobox) inside an HTML control under AIR, then the mouse selection event generates a DEACTIVATE event for the window containing the HTML control. By "mouse selection event" I mean the click on the chosen option inside the menu.
Now, if your window is defined as alwaysInFront, or if you've simulated this attribute by e.g. capturing the DEACTIVATE event and reactivating, then the selection will simply not happen, it is aborted as the focus is returned to the containing window.
Contrary to the answer in the linked thread, this is not a linux issue, I experienced it on windoze and reproduced in several scenarios and using both a manually created NativeWindow and a window generated by HTMLLoader.createRootWindow.
Cheers & happy holidays