Thank you for the Flash 10 setup advice, I did resolve that problem by setting Flex builder SDK and environment to use Flash 10 player using instructions here: http://opensource.adobe.com/wiki/display/flexsdk/Targeting+Flash+Player+10. I am adble to laod the file data into memory as ByteArray inside Flex component. But I am not able to create a Document object in Salesforce. I am getting an error that server URL need to be set to URL returned by Login. On intialization I am able to login with my SFDC credentials (running in debug from FlexBuilder). Understandable that once Flex componenet is loaded into SF org I will be abble to get a SessionID from the system to call APIs.

The problem is the error on creaing Document - IOErrorEvent UNKNOWN_EXCEPTION: Destination URL not reset. The URL returned from login must be set in the SforceService. Typically using SF webservices API in Java after login I would get result object and will set Server URL to the URL returned by the login method. In Flex I see the serverURL is set to my default value: https://www.salesforce.com/services/Soap/c/15.0 after call to apex.login method no errors reported and no result so I cannot set this URL.

I try to check for porperties in the apex inside Flex but they are all NULL

var lr:LoginResult = apex.loginResult;
var app_url:String = apex.applicationUrl;
var app_domain:String = apex.applicationDomain;       
var app_n:String = apex.applicationServerName;

I setup SF connection in Flex component in the Panel instead of Application as I have seen it done in several examples. I did not see example on how to setup connection in Panel. Not sure if this is a problem although I did try to set connection in Application still got same error? My connection code looks like this:

<mx:Panel xmlns:mx="http://www.adobe.com/2006/mxml" xmlns:com="*" xmlns:salesforce="http://www.salesforce.com/"
    layout="vertical" width="100%" minWidth="400" height="100%" minHeight="200"
    title="Upload Files" creationComplete="initCom();">
    <salesforce:Connection id="apex" serverUrl="https://www.salesforce.com/services/Soap/c/15.0" />

<mx:Script>
        <![CDATA[
            import com.salesforce.results.LoginResult;

            import mx.controls.*;
            import mx.managers.*;
            import mx.events.*;
            import flash.events.*;
            import flash.net.*;

    import mx.collections.ArrayCollection;
    import com.salesforce.results.QueryResult;
    import mx.utils.ObjectUtil;
    import mx.controls.Alert;
    import com.salesforce.AsyncResponder;
    import com.salesforce.objects.LoginRequest;
    import mx.utils.Base64Encoder   
    import com.salesforce.objects.SObject;
    import com.salesforce.AsyncResponder;
    import flash.net.FileReference;
 

            // Initalize
            private function initCom():void {
                // SF Login test
                apex.login(  new LoginRequest({
                server_url : 'https://www.salesforce.com/services/Soap/c/15.0',//this.parameters.server_url,
                //session_id : this.parameters.session_id,
                // put your own info here to test standalone
                username : '<USER ID>',
                password : '<PASSWORD>',
                callback : new AsyncResponder(render)
                }));
                        
            }

The render function is login Callback looks like this, but in debug mode it has never been called. I am guessing this may mean that my login to SF ORG has not been correct?

            private function render(result:Object):void {
                // Stub function
                var str:String = ObjectUtil.toString(result);
                trace (ObjectUtil.toString(result));               
            }
 

I get a trace of Error after trying to call apex.create method to create a Document here is relevant Exception message the full trace is large to post here:

<faultcode xmlns:ns1="urn:fault.enterprise.soap.sforce.com">ns1:UNKNOWN_EXCEPTION</faultcode>
   <faultstring>UNKNOWN_EXCEPTION: Destination URL not reset. The URL returned from login must be set in the SforceService</faultstring>
   <detail>
    <sf:fault xsi:type="sf:UnexpectedErrorFault" xmlns:sf="urn:fault.enterprise.soap.sforce.com">
     <sf:exceptionCode>UNKNOWN_EXCEPTION</sf:exceptionCode>
     <sf:exceptionMessage>Destination URL not reset. The URL returned from login must be set in the SforceService</sf:exceptionMessage>
    </sf:fault>
   </detail>