Application DPI scaling is only supported for scaling from a smaller DPI to a larger DPI. It looks like you are scaling from applicationDPI="320" down to 160, but instead should be architecting your application around setting applicationDPI="160" and let that scale up to the iPhone's higher DPI. Do you still see these issues after you make this change?
Thanks for the reply.
I did not know it was not possible to go from 320 to 160. Now the application is not for IPAD.
If I start with 160, I set the objects in pixels or percentage should I use?
You will still need to account for devices of different sizes within the same DPI class so relative sizing and positioning is probably what you often want to use.
I highly recommend watching Glenn Ruehle's talk from MAX 2011 about dealing with different DPIs and form factors: http://tv.adobe.com/watch/max-2011-develop/best-practices-for-building-flex-tablet-applica tions/