I have absolutely no idea what it may be if it is not AIR 2 that is standing in the way.
Could you clean out the installation, by physically deleting the following folders:
C:\Documents and Settings\YOUR USERNAME\My Documents\Flashificator Resources
C:\Documents and Settings\YOUR USERNAME\Application Data\com.Flashificator
C:\Documents and Settings\YOUR USERNAME\Application Data\com.Flashificator.3943FFC6DCEB62B0409E6D8D429A47AF0E76F1E2.1
That last one probably has a completely different letter/number combination, but it but there should not be more than these 2 in the Application Data folder, and both should be deleted.
BEFORE you delete these folders, make sure that you first save any files/folders you may have put there, such as custom dashboard layouts etc.
In case your Flash Player installation is corrupt, uninstall Flash from your computer using "Control Panel>Add or Remove Programs".
To make absolutely sure that your AIR installation is not at fault, go to "Control Panel>Add or Remove Programs" and remove the AIR installation.
Download and install the AIR installer from here: viewforum.php?f=27
Download and install the latest Flash Player from here: http://www.adobe.com/go/EN_US-H-GET-FLASH
Install FFC. If things are still not working for you, then copy the 4 above mentioned folders, zip them up and send to me so that I can your installation on my end.
Last week there was a client with a Pano Cocoon installation that simply didn't want to work, no matter what was done, and no matter that everything worked on my end. A couple of days spent on trying to find a solution, even changing the code for the program itself, did nothing to fix his situation.... and when I had ran out of every possible option, he found out that the AIR installer he had gotten from Adobe, was in fact version 2 and not 1.5. He had followed a link on Adobe's site which should have taken him to 1.5, so he was sure of his version being the right one.
Hopefully the above will clear things up on your end.
My destiny isn't carved in granite ...
It's written with a stick in dry sand ... on a stormy day ...