I am trying a really simple example 

<?xml version="1.0" encoding="utf-8"?>
<mx:Application xmlns:mx="http://www.adobe.com/2006/mxml"; 
layout="horizontal" creationComplete="srv.send()">
        <mx:HTTPService id="srv" url="data/catalog.xml"/>
        <mx:DataGrid dataProvider="{srv.lastResult.catalog.product}"/>
</mx:Application>

On running this example, I see this error

[RPC Fault faultString="Error #2148: SWF file file:///C:/_mystuff/
_programs/eclipse/flex2-2/ws/bin/phones.swf cannot access local 
resource data/catalog.xml. Only local-with-filesystem and trusted 
local SWF files may access local resources." faultCode="InvokeFailed" 
faultDetail="null"]

This used to work in Flex beta 3






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