I'm trying to get a swf file working. When I put the swf and xml files in the root directory, it worked flawlessly in FF and IE; when I moved them into their own directory (/flash), it works in FF, but IE will load only the swf file, and not the xml file.
Sounds like a cache issue. Flash has a habit of digging itself deep in your cache. Eliminate this possibility first. Then, consider the way your SWF is loading the XML; was its relative path to it invalidated by moving the files to their own folder?