The problem is Dreamweaver uses an older version of the swfobject.js library. You need to replace the swfobject_modified.js file that Dreamweaver automatically adds with the one that is created by Flash Catalyst. Just rename the FC version to match the DW version and overwrite the file (or change the script tag in DW).
You can replace Dreamweaver's version permanently if you want. The swfobject_modified.js file is located Dreamweaver > Configuration > Shared > Flash. Make sure you backup the file in case something goes wonky.
Hey thanks for replying, I did not go this route, but it does seem like it would work.
Anyway, after trying several different things, I noticed that in the properties panel inside of Dream Weaver that the swf version was at 11! So I changed it to 10.0 and this also worked. It might do the same thing as what you are talking about? I'm not much of a code guy.