FlashPlayer has an isolated sandbox model to provide personal information and data security and to prevent theft.

When you compile (or export) a swf, you must choose a sandbox model which are local only and network only. For example a swf compiled for local sandbox can not retrieve data from internet, can not load any type of file such as xml, jpeg, png, swf and can not send data via GET and POST. Also, a swf which is compiled for network sandbox can not access any local resources (except SharedObjects which is a minimal, isolated data storage system like HTTP cookies).

To bypass this restriction, i mean to make a swf to access any local or remote resource, you can change FlashPlayer settings via FlashPlayer gui but this is a bit complicated and an end user might not set it correctly and might be a bit painful.