We have recently discovered that there is a limitation in the flash import control (UploadImportControl2) that prevents the flash movie from completing the upload process on web applications that are using windows authentication. Applications that use Forms Authentication are not affected by this limitation. The issue lies in a windows authentication login box appearing, but never actually trying to authenticate for access to the upload directory.
The workaround for this currently is to 'degrade' the import control to the html form upload version. This can be done easily in the UploadImportControl\scripts\UploadImportControl.js file as shown below:
comment out the top line and uncomment the bottom line to change the minimum_flash_version.
//minimum_flash_version: "9.0.28", minimum_flash_version: "100",
This will make the browser think it requires a newer version of the flash player for this content, and the control will render the html version instead. Reverse the process to use the flash control again.
This technique should be used as one of the first steps in debugging import issues when using the flash control to limit the error to the flash code itself.